No entry load for close ended MF schemes

Securities and Exchange Board of India Sebi today said that initial issue expenses will be permitted only for closed-ended schemes. Open-ended schemes should meet expenses connected with sales and distribution of schemes from entry load.

8216;8216;The initial issue expenses will be permitted for closed-ended schemes only. Since closed-ended schemes are allowed to charge initial issue expenses, they shall not charge entry load,8217;8217; Sebi said in a circular here.

It said that in closed-ended schemes where initial issue expenses are amortised for an investor exiting the scheme before amortisation is completed, the AMC shall redeem the units only after recovering the balance proportionate unamortised issue expenses.