Sebi grants extension for public comments on consultation paper regarding mechanism for AMCs
Sebi has extended the timeline for submission of public comments on the consultation paper related to the total expense ratio charged by AMCs to unitholders of mutual fund schemes until June 08, 2023. Sebi seeks greater transparency and accrual of interest of economies of scale to investors.
PremiumMarket regulator Sebi extended the timeline for submission of public comments on the consultation paper related to the total expense ratio charged by Asset Management Companies (AMCs) to unitholders of mutual fund schemes. The new due date to take public comments is set on June 08, 2023.
In a notification, Sebi said, "extension of timeline for submission of public comments on the consultation paper on Review of Total Expense Ratio charged by Asset Management Companies (AMCs) to unitholders of schemes of Mutual Funds to facilitate greater transparency and accrual of interest of economies of scale to investors."
Earlier, on May 18, Sebi had placed the mentioned consultation paper. It had sought public comments by June 1, 2023.
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Sebi on Thursday said, "It has been decided to extend the timeline for submission of comments to June 08, 2023."
In the consultation paper, Sebi observed that despite the presence of various Mutual Funds with significantly large AUMs in schemes that are oriented towards retail investors i.e. Equity and Hybrid schemes, the TER charged is mostly close to the prescribed regulatory limits.
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However, in the case of Debt schemes, with investors being mostly corporates/ the debt schemes appears to be passed on to the investors but not so in the Equity and Hybrid schemes.
Also, the weighted average TERs for Debt schemes and ETFs (schemes with majorly corporatesas investors)are much lower in comparison to the regulatory limits as well as weighted average TERs of Equity and Hybrid schemes(schemes with mostly individuals as investors).
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