BSE Star MF has sent an email to fund houses warning them to suspend fresh investments in their schemes if they do not pay transaction fee. The company has reportedly suspended fresh transactions in the scheme of mid-sized mutual fund.
The exchange said that BSE Star MF would discontinue listing their schemes if they do not pay transaction fees, three fund house CEOs, who have received this email, confirmed.
Omkeshwar Singh, Head – Mutual Funds, BSE said that the company has already given fund houses a 14-month time frame to pay transaction fees.
Omkareshwar Singh told Cafemutual that seven fund houses have started paying transaction fees, adding: “AMCs have to pay such a fee with effect from December 1, 2016.” He further said that they would first suspend temporarily fresh investments in schemes and later delist the fund house if they do not pay transaction fee.
With effect from December 1, 2016, BSE started levying transaction fee on AMCs on its BSE Star MF platform, which ranges between Rs.6 and Rs.30 per transaction, depending on the volume.
However, many fund houses decided not to pay this transaction fee. Earlier, AMFI had sent a letter to BSE requesting it to reconsider its decision on levying transaction fee on AMCs. Instead, AMFI had said that such charges should be recovered from distributors, as they are the one who use such platforms to save time and costs. However, BSE had clarified that it will not levy any transaction charges on distributors for facilitating transactions on its Star MF platform. “Exchange charge is service charge which is bilateral between BSE and AMCs. AMFI has no role to play in this,” Omkareshwar said.
