India market regulator proposes uniform expense ratios for mutual funds
India's capital market regulator is proposing uniform expense ratios across mutual funds to ensure greater transparency for investors, a late evening consultation paper showed on Thursday.
The total expense ratio, or the fee charged to a mutual fund investor, should be inclusive of all expenses, the Securities and Exchange Board of India (SEBI) proposed in the consultation paper.
"It is desirable that the total expense ratio reflects the maximum expense ratio that an investor may have to pay and hence it should be inclusive of all the expenses permitted to be charged to an investor," SEBI said.
The regulator has also proposed that brokerage and transaction expenses be included within the limit of the total expense ratio.
The consultation paper will form the basis of final guidelines after seeking comments from stakeholders.
As part of the consultation paper, SEBI proposes that funds may still be able to charge additional fees for investments from smaller cities to expand the reach of mutual funds. However, this can only be charged in the case of new individual investors, the regulator added.
