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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Net Asset Value, Total Expense Ratio and Pricing of Units

Under SEBI rules, how must a mutual fund treat any entry load for schemes?

Entry load cannot be charged to investors. Since SEBI's 2009 directive, mutual fund units are allotted at the applicable NAV with no entry load, and distributors are paid commissions by the investor's separately agreed arrangement or by the AMC from expenses.

  1. AIt may be charged up to 1%
  2. BIt cannot be charged to investorsCorrect
  3. CIt may be charged only on SIPs
  4. DIt may be charged only to corporates

Explanation

SEBI abolished entry load in August 2009, so units are allotted at the applicable NAV without any entry load. The other options describe permissions that do not exist.

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