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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Fund Distribution and Channel Management Practices

Which of the following is the correct statement regarding a mutual fund distributor's obligation to show the commission earned to investors?

Distributors are required to disclose to investors the commissions they receive from AMCs, scheme-wise, as per SEBI and AMFI norms. The duty covers all scheme types, not just debt schemes, and is not optional; direct plans simply have no distributor commission.

  1. ADistributors must disclose all commissions received from the AMC to the investor, including the scheme-wise trail, on request or as per prescribed normsCorrect
  2. BDistributors need never disclose commission
  3. CDisclosure applies only to direct plans
  4. DDisclosure is required only for debt schemes

Explanation

SEBI and AMFI norms require distributors to disclose the commissions they receive from AMCs to investors in a transparent manner, across scheme types. Direct plans carry no distributor commission, and the duty is not limited to debt schemes.

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