The Securities and Exchange Board of India (SEBI) has begun an investigation into the fees and expenses that are levied by mutual fund companies in order to compare and align the relevant regulatory provisions with the practises of the market.
The SEBI routinely reviews and consults with relevant parties to ensure that regulatory provisions are consistent with market dynamics and their impact on investor interest.
In accordance with the aforementioned, SEBI has begun conducting an in-depth study of the various regulatory provisions that are currently applicable for the fees and expenses associated with mutual fund schemes in comparison to the practises of the market.
It is expected that the study or review conducted by SEBI will provide data that can be used as input for policy formulations. The policies, as they always have, will seek to strike a balance between the competing needs of facilitating financial inclusion, encouraging new participants, leveraging economies of scale, encouraging adoption of technology, discouraging cross-subsidization across schemes, closing arbitrage opportunities, etc. and preventing any malpractices.
Following the established process of stakeholder and public consultation, the SEBI will implement appropriate policy measures in due course based on the above study or review.
In a similar study conducted some four to five years ago, the SEBI learned that various mutual funds were charging small investors excessive fees totaling more than Rs 1500 crores. What has the SEBI done, if anything at all?