India’s markets regulator has proposed changes to mutual fund fee structures as it sought a more transparent break-up of costs that are charged to investors, according a consultation paper published on its website on Tuesday.
Investors are charged an annual fee called expense ratio to pay for the mutual fund’s operating expenses.
The Securities and Exchange Board of India (SEBI) has proposed that these fees should exclude all costs including brokerage and taxes, and the break-up must be disclosed upfront.
The regulator has also proposed lowering the cap on brokerage fees paid by mutual funds for cash market transactions to 2 basis points from 12 basis points.
For derivatives, SEBI has proposed cutting brokerage fees transactions to 1 basis point from 5 basis points.
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