AMCs have to cough up an annual fee of 0.0015% on AAUM of up to Rs. 10,000 crore and 0.0010% for AAUM above it.
The woes for fund houses just got bigger. SEBI has increased its annual fees which it receives from fund housesfrom the maximum limit of Rs. 7.5 lakh to Rs. 1 crore.
According to SEBI’s revised fee structure, AMCs have to cough up an annual fee of 0.0015% on the AAUM of up to Rs. 10,000 crore and 0.0010% for AAUM above it.
Earlier, fund houses were required to pay Rs. 2.5 lakh for net assets of up to Rs. 500 crore,Rs. 3.5 lakh for AUM of Rs. 500 crore to Rs. 1,000 crore, Rs. 4.5 lakh for AUM of Rs. 1,000 crore to Rs. 3,000 crore, Rs.5.5 lakh for AUM of Rs. 3,000 crore to Rs. 5,000 crore, Rs. 6.5 lakh for AUM of Rs. 5,000 crore to Rs. 10,000 crore and Rs. 7.5 lakh for AUM of above Rs. 10,000 crore.
The minimum fee which a fund house is supposed to pay SEBI is kept unchanged at Rs. 2.5 lakh.
Fund officials say that the hike in fee can affect the revenues of AMCs. For instance, a fund house having AAUM of Rs. 25,000 crore will now have to cough up Rs. 30 lakh against Rs. 7.50 lakh earlier. Similarly, large fund houses like HDFC, ICICI Prudential and Reliance have to pay a maximum limit of Rs. 1 crore to the regulator as fee.
In its notification, SEBI stated that the fees would be utilized for creating financial awareness. It said,"The revised fees structure is essentially to help in strengthening the investor awareness and education measures, enlarging reach among investors/potential investors through regional and new local offices, enhancing focus on capacity building and raising standards of supervision and enforcement function in the market place such as strengthening market surveillance and investigation function."
Check what other regulators are charging
|
Regulator |
Quantum of annual fees or renewal fees |
|
SEBI |
Rs. 2.50 lakh to Rs. 1 crore |
|
IRDA |
Rs. 50,000 to Rs. 5 crore |
|
PFRDA |
Minimum of Rs. 10 lakh flat or 0.01% of AUM |
However, the mutual fund industry has a different view. A CEO of mid-sized fund house said, “SEBI wants to discourage non-serious players. Hence, it is trying to make it tough for small fund houses so that they cannot sustain their business.”
“This hike in annual fees is not justified. Infact, SEBI has recently mandated fund houses to put 1% of amount raised or maximum up to Rs. 50 lakh to invest in all open ended equity funds. Due to such changes, many fund houses are already running short of capital. This hike has added to our woes,” said a marketing head of a bank sponsored AMC.
“We could have utilized this money for branch expansion. Typically, AMCs need Rs. 40 to Rs. 50 lakh to set up a branch. Fund house are already doing investor awareness,” said the sales head of a foreign fund house.
