SEBI has constituted a committee to suggest measures to reduce cost structure in mutual funds, said three people familiar with the development.
SEBI Chairman UK Sinha has announced this while addressing fund officials at the Annual General Meeting (AGM) of AMFI held on Tuesday in Mumbai. He told fund officials to take cue from the Bose committee report. He is reported to have said, “Managing cost is always a challenge. The mutual fund industry should come out with a solution to rationalize costs before intervention of the finance ministry.”
Bose committee has recommended that SEBI should lower the cost caps (within the TER) with growth in AUM. The committee has also recommended that fungibility within the TER should be done away with.
Sinha told fund officials that Nandan Nilekani, former Chairman of Unique Identification Authority of India (UIDAI) and co-founder of Infosys is heading this committee. The committee will oversee systems and processes in the mutual fund industry and suggest measures to reduce cost structure.
Earlier in June, Sinha had expressed his concern over cost and commission structure. He said that it has to be kept within manageable limits so that no eyebrows are raised.
