Expert speak: Higher expense ratio for B15 cities

In September 2012, the Securities and Exchange Board of India (Sebi) allowed fund houses to charge extra on daily net assets of a scheme if it performed better in beyond top 15 (B15) cities


From top to bottom (clockwise): Leo Puri, Suresh Soni, Sunil Subramaniam and Pradeep Kumar Jain
From top to bottom (clockwise): Leo Puri, Suresh Soni, Sunil Subramaniam and Pradeep Kumar Jain

In September 2012, the Securities and Exchange Board of India (Sebi) allowed fund houses to charge extra on daily net assets of a scheme if it performed better in beyond top 15 (B15) cities. Has this yielded results?

LEO PURI
CEO, UTI Asset Management Co. Ltd

This far reaching and visionary step by the regulator has catalysed the penetration of the mutual fund market beyond the top cities and resulted in financial inclusion across every state in India. This was a well-timed intervention from Sebi to optimise the spread of digital technology, growth of affluence in semi-urban areas and financial awareness initiatives by the industry.

SURESH SONI
CEO, DHFL Pramerica Asset Managers Pvt. Ltd

Four years after Sebi introduced measures to increase retail participation across India, it appears that the efforts are finally paying off. Industry assets have more than doubled during this period. Steps like investor awareness and B15 incentives have helped achieve strong growth. Assets under management from B15 cities is up by over 30%year-on-year from June 2015.

PRADEEP KUMAR JAIN
CEO, PMPK Wealth Advisors Pvt. Ltd

It has helped in mutual fund penetration in the semi-urban and rural markets. It helps to meet the cost of selling, cost of procuring compliance documents and cost of transactions. Many LIC agents are now taking interest in (mutual fund) distribution. This will go a long way in development of capital market culture as the fortune of India lies with the huge rural and urban population.

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