Capital markets regulator Securities and Exchange Board of India (SEBI) is frowning upon asset management companies bearing the expenses of passive schemes from their own books rather than from the allocated total expense ratio, or TER.
According to current norms, all scheme related expenses must be paid from the scheme and not from the books of the AMC, its associate, sponsor or trustee. Last December, SEBI had levied a penalty of ₹1 lakh each on DSP Investment Managers and DSP Trustee for taking up the expenses for DSP Nifty 50 ETF on its books.
