The Securities and Exchange Board of India has introduced several measures to make it less attractive to sell mutual fund schemes for a healthy profit. The Telegraph of Calcutta reports that under the new rules, SEBI will allow initial issue expenses only for closed-end schemes, but those schemes will not be permitted to charge entry load. Open-end schemes will be allowed to charge entry load, but will have to meet sales and marketing and expenses related to sales and distribution of schemes.

"It's a very significant move and is extremely beneficial for mutual fund investors, more so for the long-term and retail investors," Dhirendra Kumar of Value Research told the paper. In addition, a closed-end scheme cannot convert to an open-ended scheme until the balance unamortized amount has been fully recovered from the scheme.