say there is very little chance of bringing back loads as consensus seems to elude
fund CEOs are hoping that SEBI would soon hike total expense ratio (TER) and allow
fungibility in usage of this expense corpus which will allow fund houses to
manage their expenses efficiently. The
quantum of increase in TER has not been decided yet though.
houses are currently allowed to charge a maximum of 2.50% as TER on equity
“The government was more focused on issues
which could be resolved immediately. Tax related issues will be dealt with
later but the government has not lost sight of it. Increasing TER and brining fungibility in
usage of expense corpus in high on the agenda,” says a CEO who was present at
present at the meeting say that single cheque mechanism did not find favour
with all the stakeholders.
of now entry load is unlikely to come back. “There was a discussion on a
proposal whether distributors can be incentivised by paying an incentive when
clients redeem at a profit but it too didn’t find any consensus. There were
suggestions related to KYC and pension funds also. The government doesn’t want
any form of loads to come back,” says Dhruv Mehta, Chairman, FIFA.
mutual fund advisory committee, comprising 14 members representing investor
association, banks, fund houses and media is likely to give its recommendation
to SEBI next week based on which a final decision will be taken.
Dr Thomas Mathew, Joint Secretary (CM), Department of
Economic Affairs along with CEOs, Amit Tandon, AGM, SEBI, and FIFA were
present at today’s meeting.