SEBI (Securities Exchange Board of India) had earlier decided to do away with the concept of entry loads in Mutual Funds (MF). However, now this practice is likely to meet its end. As per a leading daily, SEBI has issued directives to a couple of firms to come up with a MF trading platform. Just as investors sell and buy shares online at the click of a button, they would be able to do the same with MF units, buying and selling them without an intermediary.
Considering the wide implications this can have on the MF investing culture in India, it may be the second revolution in securities transaction in India, the first one being the electronic trading of shares. Such a step will also create level playing field for all mutual fund schemes as the option of pushing through schemes by paying extra commissions to distributors will all but vanish from the scene.
It looks like a win-win situation for both the investors as well as the mutual funds indeed.