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The Sebi (Securities and Exchange Board of India) in its latest consultation paper on reviewing the SEBI (Mutual Funds) Regulations, 1996 has proposed an optional performance-linked Total Expense Ratio (TER) — a model where fund fees rise or fall depending on how well a scheme performs – for Asset Management Companies (AMCs).

SEBI pitched that this new provision “shall be voluntary for AMCs," meaning fund houses can choose whether to adopt it.

TER is the total annual cost charged to investors in a mutual fund scheme. It includes management fees, operational expenses, marketing, registrar fees, and more — expressed as a percentage of the scheme’s AUM (Assets Under Management).

Ajay Kumar Yadav, CFPCM, Group CEO & CIO at Wise Finserv told News18.com that the idea

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