1. This anomaly is an unresolved work-in-progress issue between Amfi and Sebi since 2013 when direct plans were introduced.
2. Sebi's existing guidelines mandate that AMCs should calculate dividend for each plan on its own distributable surplus.
3. A plan’s distributable surplus is computed as its NAV minus its face value, unrealised gains and accumulated Unit Premium Reserve (UPR).
4. UPR is determined at the plan level after apportioning realised and unrealised gains in the ratio of the respective AUM.
5. During launch of Direct plans in 2013, there were huge one-time inflows/switches from Regular plans, and based on unrealised gain at that time, large UPRs got created in Direct plans, making distributable surplus more in Regular plans.
6. Besides this, a Direct plan's cumulative distributable surplus is also still far lesser than its Regular plan, being only 6 years old.
7. So, under Sebi's existing accounting regulations, even when annual returns of Direct and Regular plans of a fund are same, AMCs can't declare same annual dividend in both plans, as their individual computation will continue to be different due to UPR balance in their plans.
8. However, declaration of a dividend for each plan is the sole prerogative of AMCs, even decision of declaring it or not, or whether to keep it same for direct and regular plans.
9. Hence there may not necessarily be a clear difference kept every year.
2. Sebi's existing guidelines mandate that AMCs should calculate dividend for each plan on its own distributable surplus.
3. A plan’s distributable surplus is computed as its NAV minus its face value, unrealised gains and accumulated Unit Premium Reserve (UPR).
4. UPR is determined at the plan level after apportioning realised and unrealised gains in the ratio of the respective AUM.
5. During launch of Direct plans in 2013, there were huge one-time inflows/switches from Regular plans, and based on unrealised gain at that time, large UPRs got created in Direct plans, making distributable surplus more in Regular plans.
6. Besides this, a Direct plan's cumulative distributable surplus is also still far lesser than its Regular plan, being only 6 years old.
7. So, under Sebi's existing accounting regulations, even when annual returns of Direct and Regular plans of a fund are same, AMCs can't declare same annual dividend in both plans, as their individual computation will continue to be different due to UPR balance in their plans.
8. However, declaration of a dividend for each plan is the sole prerogative of AMCs, even decision of declaring it or not, or whether to keep it same for direct and regular plans.
9. Hence there may not necessarily be a clear difference kept every year.