Sebi considers bringing in new expense structure for mutual funds

Plans to link expense ratio to AMCs' total AUM in an asset class

The Securities and Exchange Board of India (Sebi) is discussing with mutual funds (MFs) a proposal on introducing new total expense ratio (TER) slabs linked to the total equity and debt assets by replacing the current ones that are linked to assets of an individual scheme.

Senior MF executives confirmed that Sebi had held discussions on this matter with AMCs.

Such a change is expected to lead to a lower TER cap for bigger asset management companies (AMCs). TER is the expenses charged by AMCs for managing a scheme.

If the new model is implemented, fund houses will have to