India markets regulator’s board clears mutual fund fee revamp, defers conflict of interest framework
- SEBI greenlit measures to encourage a transparent break-up of costs charged by mutual funds
MUMBAI: India’s markets regulator on Wednesday approved changes to mutual fund fee structures aimed at providing more transparency to investors, but deferred its decision on a new framework to manage conflicts of interest among its senior officials.
The Securities and Exchange Board of India (SEBI) greenlit measures to encourage a transparent break-up of costs charged by mutual funds and also mandated the disclosure of all the components of such charges.
However, SEBI revised its earlier proposal to cap the brokerage that mutual funds pay, raising the limit to 6 basis points from the earlier 2 bps for equity cash transactions, after industry feedback that a sharp reduction could curb fund managers’ ability to pick stocks.
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Presently, fund managers pay up to 12 bps as brokerage to buy and sell stocks in their portfolios.
SEBI’s board also postponed a proposal for senior officials to disclose their financial assets and liabilities to an independent officer at the regulator.
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