Business Daily from THE HINDU group of publications
Tuesday, Aug 10, 2010
ePaper | Mobile/PDA Version | Audio | Blogs

Foreign Exchange

Group Sites

Home Page - Mutual Funds
Markets - Regulatory Bodies & Rulings
SEBI asks MFs to spell out expense structure, offer exit options

Our Bureau

Mumbai, Aug. 9

The Securities and Exchange Board of India  has said that fund houses offering fund of funds schemes need to clearly spell out the expense structure that they would be adopting post- July 29.

The regulator has stipulated that fund houses, after getting approval from their trustees, are expected to inform unit holders about the expense structure that they would adopt going forward.

Mutual funds offering a fund of funds scheme can either levy a management fee not exceeding 0.75 per cent or management fee not exceeding 0.75 per cent plus other administrative expenses plus underlying scheme charges subject to a cap of 2.5 per cent on a daily/weekly NAV basis.


Further, the regulator has advised fund houses to give unit holders an exit option, if they deem fit to exit before implementing the new expense structure.

Commenting on the development, Mr Rajesh Krishnamoorthy, Managing Director of iFAST Financial, a financial planning Web site, said: “Communication to the investor will have to carry an illustration of how each option in the expense structure will affect his investment.

“This will help one in taking an informed decision on what one should do with one's investment.”

MF sales personnel are circumspect about whether the investor will actually understand what is being communicated to him by the regulator.

Management fee

Earlier, it was 2.5 per cent for investment management and advisory plus a management fee of 0.75 per cent for fund of funds making it a maximum of 3.25 per cent. Now, it is 0.75 per cent or 0.75 per cent plus other expenses subject to a maximum of 2.5 per cent.

Related Stories:
SEBI amends MF regulations
Entry load: Effect of SEBI's decision on AMCs and investors
SEBI to come out with working paper on selling practices of MFs

More Stories on : Mutual Funds | Regulatory Bodies & Rulings

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Media playing up ‘hunt for successor': Ratan Tata

IT vendors' BPO business slows down
India terms US visa fee-hike plan ‘overwhelmingly protectionist'
Will Fed backtrack on ‘Quantitative easing'?
Top 5 MFs account for 68% of total complaints
SEBI asks MFs to spell out expense structure, offer exit options
Finance Ministry dilutes 25% minimum public float norm for PSUs
CMD Hamied's nephew to be formally inducted into Cipla
Coast Guard leads oil spill control effort
Collision shuts traffic at JNPT, Mumbai ports
B.L.Kashyap and Sons (Rs 388): Buy
Day Trading Guide
Building a ‘brain', the AGT way
Sensex rallies despite RIL's lacklustre show
FIIs bet on debt; Jan-Aug inflows 8 times calendar 2009's $1 b
Of free milk and treadmills

The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2010, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line