Entry Load is a charge or a commission levied on the investor during the purchase transaction of mutual funds. This is also known as Front End Load and such funds which levy an entry load are called Front End Load Funds. The entry load is deducted from the investment amount resulting in a reduction of the investment amount. Entry load is levied for covering the distribution and marketing costs of a fund.
What are SEBI regulations regarding Entry load?
In India, the Securities and Exchange Board of India (SEBI) removed entry load on mutual fund investments in the year 2009 and thus there is no Front end or Entry Load on mutual funds. There is however, an ‘Expense Ratio’ which is part of mutual fund structure for covering various operational and other costs for running a mutual fund.
