Statutory Disclosures

Financial Planning:

As per Sebi Investment Advisers Regulations, 2013, no person can act as an Investment Adviser which includes doing financial planning for clients, unless that person is registered with SEBI in accordance with these regulations.  However, in accordance with Section 4 (d) of these Regulations, a Mutual Fund distributor who is registered with AMFI and provides investment advice to its clients incidental to its activity of advising mutual fund schemes is not required to be registered under these Regulations.

Further, AMFI’s code of conduct requires Mutual Fund Distributors to give the highest importance to investor’s interests and recommend products which are in the best interests of the investor.  Further, understanding the risk profile of clients is also a must.  Accordingly, we aim to understand the needs and requirements of our clients as well as their risk profile for the sole purpose of recommending the right mutual fund schemes and other investment products.  We cannot do financial planning on a stand alone basis and charge separate fees for the same.  These services can be provided by a Registered Investment Adviser.  We aim to do understand and analyse your assets, liabilities, income, expenses, future objectives, etc with the sole purpose of recommending suitable investment products that will help in achievement of your goals.

Mutual Funds:

EquiZen is a mutual fund distributor registered with the Association of Mutual Funds of India (AMFI) under the name of Sanjay Parikh. Our ARN code is 272487. AMFI is an industry association of all the mutual funds in India. AMFI regulates the distribution of mutual funds and lays down the rules and regulations and code of conduct that all distributors of mutual funds have to adhere to.   A mutual fund distributor has to be empanelled with the Asset Management Company (AMC) of a Mutual Fund to recommend their schemes to clients.  We are empanelled with a number of AMCs.  The current list of the AMCs with whom we are empanelled can be found in the same link where we have disclosed the trial commission rates that we will earn from these AMCs for recommending their schemes.  Clients are free to consider and invest in other schemes of an AMC with whom we are empanelled or even other AMCs.  If we recommend a particular scheme or class of schemes, then the information that we will share with you will be limited to the scheme or class of schemes that we are recommending.  In addition to mutual fund schemes, clients can consider other investment products such as equity shares, bonds & debentures, Portfolio Management Schemes, Alternative Investment Funds, Government savings schemes,  fixed deposits, etc.  Mutual Fund schemes invest in equities, debt securities, gold and silver and hence provide a wide variety of schemes.  Each AMC prepares a document called the Statement of Additional Information (SAI) which gives details of the AMC, the mutual fund trust and the Trustee company, their directors, key employees, financial information, etc.  Further, each scheme has a document called the Scheme Information Document (SID) which gives detailed information on the scheme regarding its investment objectives, asset allocation, liquidity, conditions for sale and purchase of units, etc.  Each client is required to review the SID and SAI of each scheme in detail and understand the risk factors of the same.  The SID and SAI of schemes will be available on the website of AMFI at www.amfiindia.org.  The link to the SAIs of all AMCs is https://www.amfiindia.com/otherdata/statement-of-Additional-Information and the link to all the SIDs of the schemes is https://www.amfiindia.com/otherdata/scheme-details.

Mutual Fund distributors earn commission from the Asset Management Companies (AMC) that manage the schemes. There is no up-front commission paid by the AMCs to the distributors. The entire commission is paid as a trail commission. An example of the same is as under:

Let’s say that a customer has invested Rs 100,000 at the beginning of the year. The amount at the end of the year is say Rs 115,000. Assuming that the AMC is paying 0.75% as trail rate of commission and the average assets are Rs 107,500 in the entire year, the AMC will pay an amount of Rs 806 for the year. This is actually computed and paid every month on the actual average AUM for each month. The rates normally paid by AMCs to distributors differ based on the AUM of each scheme as also the type and the assets that are invested into by the scheme. Generally, Equity schemes pay a higher rate than other schemes which may not be true in case of very large schemes. The rates generally paid for different schemes is as under:

	Equity schemes	Debt schemes	Liquid schemes	Index schemes
Rates paid by AMCs	0.5% – 1.75%	0.15% – 1%	0.05% – 0.15%	0.05% – 0.5%

Note : These are just broad ranges of the rates that the AMCs may pay to Distributors. It is possible that some AMCs may pay a rate higher or lower than the rates mentioned above. Generally, the difference in the Total Expense Ratio between Direct and Regular plans of schemes is the average rate of commission paid by the AMC. If you want to know the exact rate earned by us for a particular scheme, please write to us. The trail rates received by us from different AMCs can be found here.

Other products:

EquiZen is currently empanelled with Hdfc Standard Life Insurance Co Ltd as an insurance agent.  We are also empanelled with APMI for distribution of PMS schemes.  Further, we are empanelled as distributors of fixed deposits with Shriram Finance Ltd and Bajaj Finance Ltd. We also have a tie up with certain large financial products distribution companies. This allows us to offer a wider range of products to clients.  These companies may pay a portion of their income to us for recommending products to clients. Typically, the income is up-front and highest for life insurance products followed by health and other insurance policies. For investment products such as bonds/debentures, fixed deposits, etc, the earnings range from 0.25% to 2.5% on an up-front basis. We may also get a part of the fee if we are involved in arranging a loan for you.  Income from PMS and AIFs is generally in the form of trail commission.  These rates may range from 0.5% to 2% per annum.  These could be higher if the AMC chooses to share their performance based fees with us.

While we have made a fair disclosure of the income that we will earn from the products in which you invest, please be assured that our priority will be to recommend only those products that are suitable and are required by you. The income that we earn from them will not be a driver for our recommendations. For any clarifications, please call or write to us.

Code of conduct for Mutual Fund Distributors

A link to the AMFI code of conduct for mutual fund distributors is given below:

https://www.amfiindia.com/downloads/revised-code-conduct-of-inter-mf

Risks related to investments

Mutual Fund investments are subject to market risks. Please read the scheme information and other related documents carefully before investing. Past performance is not indicative of future returns. Please consider your specific investment requirements while choosing a scheme or schemes.  There is no guarantee that the investment objective of any suggested scheme shall be achieved. All existing and prospective investors are advised to check and evaluate the Exit loads and other cost structure (TER) applicable at the time of making the investment before finalizing on any investment decision for Mutual Funds schemes. We deal in Regular Plans only for Mutual Fund Schemes and earn a Trailing Commission on client investments. Disclosure For Commission earnings is made to clients at the time of investments. Option of Direct Plan for every Mutual Fund Scheme is available to investors offering advantage of lower expense ratio. We are not entitled to earn any commission on Direct plans. Hence we do not deal in Direct Plans.

All investments in equity securities are subject to market and company specific risks. One can reduce company and sector specific risks by diversification. However, market related risks cannot be diversified away.

Fixed income investments are subject to credit risk as well as interest rate risks. Credit risk is the risk that the interest and/or the principal may not be paid on due date/s. Interest rate risk refers to the fluctuations in the market price of fixed income securities due to changes in interest rates in the economy. Market prices of fixed income securities are inversely related to movements in interest rates. When interest rates fall, market prices of fixed income securities rise and vice versa. This does not affect fixed deposits since the same are not traded.

The above are some of the risks that affect investments. There may be other risks that may also be applicable to different products.  Please read the offer documents (such as SAI and SID for mutual fund schemes, etc) to get a good understanding of the product features as well as the general market and scheme specific risk factors that will apply to different products.  Links to mutual fund schemes documents has been published above.