Northspread
Formula sheet/NISM Series V-A: Mutual Fund Distributors/Fund Distribution and Channel Management Practices
[ FUND DISTRIBUTION AND CHANNEL MANAGEMENT PRACTICES ]

Additional Distribution Incentives (B-30 Cities & Women Investors)

Lump Sum Incentive:1%of first application amount,subject to a maximum cap of Rs2,000(minimum1−year holding).\text{Lump Sum Incentive}: 1\% \text{of first application amount}, \text{subject to a maximum cap of Rs} 2,000 (minimum 1-\text{year holding}).
SIP Incentive:1%of total first-year investment,subject to a maximum cap of Rs2,000.\text{SIP Incentive}: 1\% \text{of total first-year investment}, \text{subject to a maximum cap of Rs} 2,000.
Variables

Paid from the 2 bps investor education fund set apart annually by AMCs. Dual claiming is prohibited.

Exam note

Aims to expand mutual fund penetration across smaller towns (Beyond Top 30) and female investors.

Worked example
Additional Distribution Incentives (B-30 Cities & Women Investors)

An MFD onboards two new individual investors: (1) A new investor from a B-30 city who invests a lump sum of Rs 1,50,000 in a regular equity scheme and stays invested for 14 months; (2) A new female investor from a Top-30 city who starts a monthly SIP of Rs 10,000 for 12 months. Calculate the additional distribution commission payable by the AMC.