SEBI to incorporate all expenses and taxes within TER
SEBI will bring all expenses and taxes within TER. In a press meeting held recently, Madhabi Puri Buch said that fund houses should consider all expenses and taxes within the TER limit.
Madhabi said, “When we say total expense ratio, it should be total without any ifs or buts.”
Simply put, SEBI wants fund houses to incorporate GST levied on fund management within the maximum permissible TER. The market regulator also wants fund houses to include brokerage cost in TER.
Currently, fund houses charge GST of 18% on the fund management component, which is over and above the maximum TER limit. In addition, fund houses pay brokerage to the security companies on MF transactions, which is over and above TER.
“If you are taking asset management fees to manage the assets, then why are you paying such large sums to the broker for the research that you were supposed to do. The other thing we found was the distinct possibility that the brokerage was being paid for reasons other than professional ones. This is not coming under anyone’s radar because the board of the AMCs are not looking at it. The minute you bring it under TER, automatically the board of the AMC will seek justification on such payments to brokers,” Madhabi said.
SEBI, the Securities and Exchange Board of India, has mandated that all mutual fund houses incorporate all expenses and taxes within the Total Expense Ratio (TER) of their funds. This move aims to bring greater transparency in the pricing of mutual funds and make it easier for investors to compare different schemes.
The TER is a measure of the total cost of managing a mutual fund. It includes various expenses, such as management fees, administrative expenses, and marketing expenses. Earlier, certain expenses, such as transaction charges and Goods and Services Tax (GST), were excluded from the TER and charged separately to investors. This made it difficult for investors to understand the true cost of investing in a particular scheme.
With the new mandate, all expenses and taxes related to managing a mutual fund will be included in the TER. This will provide investors with a more accurate picture of the total cost of investing in a particular scheme. Moreover, it will also encourage mutual fund houses to be more cost-efficient in managing their funds and offer more competitive pricing to investors.
Overall, the move is expected to benefit investors by bringing greater transparency in the pricing of mutual funds and making it easier for them to make informed investment decisions.
#insurance #lifeinsurance #insuranceagent #insurancebroker #healthinsurance #business #investment #carinsurance #covid #homeinsurance #finance #autoinsurance #insuranceagency #health #businessinsurance #financialplanning #family #seguros #life #money #financialfreedom #insurancepolicy #insuranceclaim #protection #auto #car #realestate #insuranceagents #financialadvisor #retirement
