New Delhi: A Sebi-appointed panel aims to boost mutual fund investments via distributor is planning a new incentive model wherein investors might be asked to pay a service fee and commissions would be borne by fund houses.

The proposals also involve a single-cheque payment for the combined amount of the agreed investment and service fee or transaction cost, which could be capped at an amount between Rs 100-200 per transaction, an official said.

However, the distributors might be subjected to a stricter regulatory framework along with their new payment structure, so that investors are not misled by them, he added.

The panel, comprising Sebi's whole-time member Prashant Saran and representatives of the mutual fund industry and one investor association, was set up late last month and has had two meetings so far, the latest being on Friday last.

The panel is likely to finalise its proposals and submit the same to Sebi in a couple of weeks, the official said.

Subsequently, the proposals would be discussed by Sebi's permanent Mutual Fund Advisory Committee and a final decision is expected by July, he added.

Sebi Chairman U K Sinha, who was earlier heading UTI Mutual Fund as also the industry body Amfi and took charge as chief of the market regulatory body in February, agreed to set up the panel after repeated representation by fund houses.

The funds have been complaining that their business has taken a hit and distributors were feeling left out since the August 2009 abolition of entry load -- a fee charged to the investors at the time of their investment in a MF scheme.

A major portion of the entry loads used to go to the fund distributors as their commission payments and the abolition of this charge has left them un-incentivised, the fund houses have agrued, although the decision was welcomed by investors.

Currently, distributors are allowed to charge a fee from the investors, but they are required to follow a dual-cheque policy, wherein they cannot club the investment amount and their fees on a single cheque they collect from the investor.

However, even the members of the Sebi-appointed panel are not unanimous so far on the proposed incentive structure.

Those opposed to the single-cheque policy argue that investors might be misled by the agents and could be made to believe that the entire amount, including of the transaction cost, would be their investment.

On the other hand, some fund houses are not agreeable to the payment of per-transaction commissions to the agents, saying it would dent their profitability and the distributors were already getting various periodic payments and incentives.

The panel is also believed to have discussed a regulatory framework for distributors to guard against mis-selling by them and weed out the errant agents from the system.  As of now, most of the fund houses have framed a 'voting policy' and disclose the same on their websites. However, only a select few have made public their votes on various proposals made by the companies, where these MFs have invested.

The fund houses who have made their votes on various proposals made by the companies public on their websites include smaller ones like Mirae Asset and Quantum MF.

Those who have disclosed their voting policies include UTI, SBI, Reliance, HDFC, Religare, Fidelity and Birla Sunlife Mutual Fund.

The official said that Sebi's directive is based on its view that mutual funds should play an active role in ensuring better corporate governance of listed companies.

It was this stance that led to Sebi asking the fund houses to disclose a 'voting policy' on their websites as also in their annual reports from the financial year 2010-11 onwards.