Direct plan option for AIFs and trail-only distribution commissions increase fee transparency and investor choice. SEBI requires AIF schemes to offer a Direct Plan without any distribution or placement fee and to onboard investors referred by registered intermediaries under the Direct Plan. AIFs must disclose any distribution/placement fee at onboarding. Category III AIFs may only remunerate distributors on an equal trail paid from the manager's management fee with no upfront payments, while Category I and II AIFs may pay up to one-third of distribution fees upfront and the remainder on equal trail over the fund's tenure.
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Direct plan option for AIFs and trail-only distribution commissions increase fee transparency and investor choice.
SEBI requires AIF schemes to offer a Direct Plan without any distribution or placement fee and to onboard investors referred by registered intermediaries under the Direct Plan. AIFs must disclose any distribution/placement fee at onboarding. Category III AIFs may only remunerate distributors on an equal trail paid from the manager's management fee with no upfront payments, while Category I and II AIFs may pay up to one-third of distribution fees upfront and the remainder on equal trail over the fund's tenure.
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