On AMCs charging brokerage and transaction charges to the MF scheme as additional expenses, the regulator was of the view, “It has been observed that AMCs have executed trades through brokers who were not part of the top brokers (in terms of percentage share of the gross turnover of the stock exchange) and offered services at high brokerage costs compared to other empanelled brokers. Sebi wants AMCs to charge all additional expenses within TER, to encourage uniformity and transparency. The maximum permissible TER rate has been increased slightly by Sebi from 2.25%, but it has been done to allow the mutual fund industry to adjust the TER for absorption of the GST (goods and services tax) borne on the investment and advisory fees. This limit is available for AMCs that fall within the first AUM slab (upto ₹2,500 crore). The regulator also reviewed the AUM (assets under management) slab-wise structure, that determines the TER charges in the existing framework.įor the new framework, Sebi has proposed that at the AMC level, the maximum TER that can be charged for an equity scheme is 2.55%.
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