1. The petitioners herein are distributors, “who sell mutual funds to investors”. Earlier mutual funds were loading entry charges of upto 2 ½ % on any investment made in a new mutual fund. Part thereof was passed on to the distributor towards his commission.

2. Securities and Exchange Board of India (SEBI, for short), respondent No. 1 herein, has now issued a new circular/guidelines dated 30th June, 2009 under which the mutual funds are barred from charging entry load.

The relevant portion of the circular dated 30th June, 2009 reads as under:- “a) There shall be no entry load for all mutual fund schemes.

b) The scheme application forms shall carry a suitable disclosure to the effect that the upfront commission to distributors will be paid by the investor directly to the distributor, based on his assessment of various factors including the service rendered by the distributor.

c) Of the exit load or CDSC charged to the investor, a maximum of 1% of the redemption proceeds shall be maintained in a separate account which can be used by the AMC to pay commissions to the distributor and to take care of other marketing and selling expenses. Any balance shall be credited to the