A Back-End Load (also called a Deferred Sales Charge or Exit Load) is a fee charged to investors when they redeem or sell their mutual fund units. Unlike a front-end load (charged at the time of purchase), a back-end load is applied upon exit. In India, SEBI regulations restrict the maximum exit load that mutual funds can charge and require that all exit load proceeds be credited back to the fund. Exit loads are commonly used by fund houses to discourage short-term redemptions and encourage long-term investor behaviour.
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