Sebi asks MFs not to ask for NOCs

Making it easier for mutual fund investors to switch distributors, market regulator Securities and Exchange Board of India (Sebi) today said it is doing away with the practice of obtaining a no objection certificate (NOC) from existing distributors.

In a circular to all mutual funds and asset management companies (AMCs) the market regulator said: "You are advised to ensure compliance with the instruction of the investor informing his desire to change his distributor and/or go direct without complleing that investor to obtain an NOC from the existing distributor."

Sebi said Association of Mutual Funds of India (AMFI), had in 2007, asked AMCs to act on instruction of the investors if they desire to change their distributor....

"It appears this mandate is not being followed by the mutual fund industry...Some AMCs are insisting on the investor procuring an NoC from the existing distribtuor for this switch over," Sebi said.

 

--- PTI