Starting April 1, 2008, Mutual Funds can no longer charge entry & exit loads for Bonus & Dividend Reinvestments. SEBI issued a new circular on March 18, 2008 to this effect. This move is based on recommendations from AMFI’s Working Group on Standardization of Key Operational Areas.
This is a welcome move. Dividends and Bonus are not new purchases. They come from the investor’s money. So why should the investor be made to pay a price?