Listing fees for close-ended MFs may be cut

Stock exchanges may reduce the annual listing fees for close-ended mutual fund schemes which will have to get listed to comply with a recent Securities and Exchange Board of India directive.

A BSE spokesperson could not immediately confirm the development, but NSE officials confirmed that the exchange would reduce the listing fees for close-ended funds.

Sebi Chairman C B Bhave had said last week that all close-ended schemes (except equity-linked schemes) that are launched on or after December 12 must be listed on the exchanges.

In a circular today, Sebi said that the listing fees for close-ended schemes shall be "permissible" expense to be charged under regulation 52 (4). This means that the listing fee is linked to the scheme's expenses and may be recovered from the investors in the scheme. The decision to reduce listing fees may have a bearing on the expenses of the scheme that are ultimately recovered from the investor. Debt mutual funds are allowed to charge up to 2.25 per cent as expenses, while equity schemes can charge upto 2.5 per cent currently.

Currently, NSE charges Rs 7,500 as initial listing fees in the capital market segment. There are annual listing fees as well, ranging from Rs 4,200 to Rs 70,000 depending on the paid up share capital or debenture capital of the company that gets listed. The exchange has a different listing fee for companies that have a paid up capital of more than Rs 50 crore.

In the case of the BSE, the fund schemes would fall under the category of "securities other than privately placed debt securities". The exchange charges an initial listing fee of Rs 20,000. It charges an annual listing fee from Rs 10,000 to Rs 30,000 based on the issue size. In the case of mutual funds, the exchanges normally consider assets under management of the scheme to determine the annual listing fee.

All the exchange-traded schemes are listed in the capital market segment. The exchanges don't distinguish between equity schemes and debt schemes but only consider the number of investors to whom the issuance is made.

In this case, the close-ended fixed maturity plans will get listed in the capital market segment if the number of investors who buy the units are more than 49, in most cases.