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MF News Fund houses to disclose scheme TER daily

Fund houses to disclose scheme TER daily

In addition, fund houses will now have to intimate investors three working days prior to making any revision in their TER structure.
Team Cafemutual Jun 6, 2018

SEBI has asked fund houses to disclose total expense ratio (TER) of each scheme under both regular and direct plans on a daily basis.

With this, fund houses will have to introduce a separate tab called ‘Total Expense Ratio of Mutual Fund Schemes’ on their website in a downloadable spreadsheet, directed SEBI.

This has come after SEBI observed frequent changes in TER in MF schemes. In addition, SEBI found that a few AMCs do not intimate investors about such changes. “AMCs  shall  prominently  disclose  on  a  daily  basis,  the  TER (scheme-wise, date-wise) of all schemes under a separate head – Total Expense Ratio  of  Mutual  Fund  Schemes  on  their  website  and on  the  website  of AMFI in downloadable spreadsheet format,” said SEBI in a circular.

Fund houses will now have to intimate investors by sharing a notice through email or SMS at least three working days prior to making any revision in TER of the scheme. In addition, fund houses are required to put such a notice of change in base TER on their website prominently.

So far, fund houses have been disclosing change in TER on their website within two working days of making such changes.

Fund houses will have to inform the board of directors of the AMC about the revision in TER along with the rationale for their decision.

The circular has come into effect immediately.

Another key development is the change in the format of TER disclosure on a scheme information document (SID). Here is the new format of disclosing TER on SID.

2 Comments
Srini · 2 weeks ago
We are proud to say that Mutual Funds has the highest of transparency amongst financial products. But sharing these changes of TER on a daily basis to the investor only brings confusion in the mind of the investor. So our suggestion is to inform the investor by a mail at the end of every month rather daily (as such information is already historical). When it is done on a daily it becomes a irritant and the investor ignores it or deletes it thus the idea of transparency goes for a toss.
Doddi Venkata Ramana · 2 weeks ago
Disclosure is nice, but who studies it to the extent of it's utility. If an investor studies it that much, he would study also the other imperatives of his investments. If it is so, he would not invest at market peaks and exit at market lows. He would not be from a herd. In actual sense investors may not be interested in low cost funds and elaborate disclosures. May be we need to study what are investors interest. Is it reduced TER, disclosures or an advisor with integrity and understanding. If we agree that a good advise is what investors need, why not we work on those areas. Then you would know who churns investor's money like nobody's business. Who advises investors looking at his bank balance. who advises basing on their targets.


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