Markets regulator Securities and Exchange Board of India is deliberating on allowing mutual funds to charge higher expenses for direct plans.
Such plans bypass distributors and have a lower expense ratio than the regular plans. This is to the extent of the brokerage or commission paid to distributors of the regular plans.
Say an equity scheme is charging 150 basis points in its regular plan and the distributor commission works out to 50 bps, the direct plan offered cannot charge more than 100 bps.
