Lesson 34 of 50 for advisers · Clawback · 3 min read · Reviewed 13 Nov 2026
When trail paid in advance on a first-time investor’s small SIP is not earned because the SIP stops: it is recovered pro rata. The new-investor incentive is also subject to clawback if the investor leaves within a year. Other clawback comes from each fund house’s own commission terms, which distributors must honour.
Commission is trail only. The one advance payment allowed is up to 1% a year of trail, for up to 3 years, on a first-time investor’s SIP of up to ₹3,000 a month.
If that SIP stops early, the unearned part is recovered from the distributor, pro rata.
The new-investor incentive, 1% up to ₹2,000, assumes the investor stays a year; it carries clawback provisions.
Any other clawback comes from the fund house’s own commission terms. AMFI’s code requires distributors to refund it, by set-off or payment.
Key idea: When a book moves to a new distributor, the trail stays subject to the clawback that applied before.
Try the short quiz on this page to check what stuck.
SEBI and AMFI set no such general rule. It would come from a fund house’s own terms.
By set-off against future commission or by payment, as the AMFI code requires.
The fund house, from its own books, amortised daily to the scheme.
For learning only, not investment advice. Built in India by a team that tracks its own money on Reva.