U K Sinha said that SEBI will not intervene in regulating distributor commissions at this juncture. He was responding to a question on SEBI’s stand on the recommendations of Sumit Bose Committee to reduce the TER and distributor commissions.
Speaking at an event in Mumbai, Sinha said, “There is definitely a case for reduction of costs and fees because there are studies which show that our costs are one of the highest in the world. SEBI does not want to get into this issue of what is the right amount of fee. We would like the industry to take the initiative. We have some evidence of the industry doing it.”
Sinha said that SEBI will wait for some more time to see if the industry is moving towards reducing costs. If not, he said that SEBI has the authority to intervene. “If the industry does not correct itself we can take action,” cautioned Sinha.
However, Sinha pointed out that investors are not suffering due to high costs and commended the industry for superior fund performance. “90% of equity mutual fund assets (over three and five year period) have outperformed the benchmarks. This is something which needs to be acknowledged.”
