In a Thursday evening consultation paper, India’s capital market regulator proposed consistent expense ratios for mutual funds to increase investor transparency.
SEBI suggested including all expenses in the overall expense ratio or mutual fund investor fee in the consultation document.
“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 also suggests including brokerage and transaction costs in the total expense ratio.
Stakeholder feedback on the consultation paper will shape the final guidelines.
SEBI suggests in the consultation document that funds can charge more for investments from smaller cities to improve mutual fund coverage. However, the regulator added that only new individual investors could be charged.
