SEBI Circular for review of additional expenses of up to 0.30% towards inflows from beyond top 15 cities (B15) under Mutual Funds or AMCs, etc.

Feb 05, 2018 | by Avantis RegTech Legal Research Team

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The Securities and Exchange Board of India (SEBI) has issued a circular for all Mutual Funds, Asset Management Companies (AMCs), Trustee Companies and Boards of Trustees of Mutual Funds. SEBI has reviewed the additional expenses of up to 0.30% towards inflows from beyond top 15 cities (B15).

As per Para A(1) of SEBI circular CIR/IMD/DF/21/2012 dated September 13, 2012, the additional TER can be charged up to 30 basis points on daily net assets of the scheme, if the new inflows from  beyond  top  15  cities  are at  least:

(a)  30% of gross new inflows in the scheme or

(b)  15% of the average assets under management (year to date) of the scheme, whichever is higher.

SEBI circular also mentioned that additional TER for inflows from beyond top 15 cities (B15 cities) was allowed with an objective to increase penetration of mutual funds in B15 cities. Since more than 5 years have elapsed and on review, regulatory authority has decided that the additional TER of up to 30 basis points would be allowed for inflows from beyond top 30 cities instead of beyond top 15 cities.

SEBI has modified the circulars i.e. SEBI Circular CIR/IMD/DF/21/2012 dated September 13, 2012 and SEBI Circular CIR/IMD/DF/05/2014 dated March 24, 2014, whereby at all relevant places, the terms  “15  cities”,  “T15”  and “B15” would  be substituted with “30  cities”, “T30”  and “B30” respectively, while keeping the other provisions of the circulars unchanged.

This circular shall be applicable with effect from April 1, 2018.

[SEBI Circular: SEBI/HO/IMD/DF2/CIR/P/2018/16]




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