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TMI BlogSteps to re-energise Mutual Fund IndustryX X X X Extracts X X X X X X X X Extracts X X X X ..... cided to implement the following: A. Total Expense Ratio (TER) 1. Additional TER can be charged up to 30 basis points on daily net assets of the scheme as per regulation 52 of SEBI (Mutual Funds) Regulations, 1996 (hereinafter referred to as Regulations), 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. In case inflows from beyond top 15 cities is less than the higher of (a) or (b) above, additional TER on daily net assets of the scheme shall be charged as follows: Daily net assets X 30 basis points X New inflows from beyond top 15 cities 365* X Higher of (a) or (b) above * 366, wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an and ensure that all new investors are subject to single expense structure. 2. Existing schemes with multiple plans based on the amount of investment (i.e. retail, institutional, super-institutional, etc) shall accept fresh subscriptions only under one plan. 3. Other plans will continue till the existing investors remain invested in the plan. D. Separate option for direct investments 1. Mutual funds/AMCs shall provide a separate plan for direct investments, i.e., investments not routed through a distributor, in existing as well as new schemes. 2. Such separate plan shall have a lower expense ratio excluding distribution expenses, commission, etc., and no commission shall be paid from such plans. The plan shall also have a separate NA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... products, in addition to the AMFI Registration Number (ARN) of the distributor. 6. The application form for mutual fund schemes shall have provision for disclosing the unique identity number of such sales personnel along with the ARN of the distributor. F. Investor Education and Awareness 1. Mutual Funds/AMCs shall annually set apart at least 2 basis points on daily net assets within the maximum limit of TER as per regulation 52 of the Regulations for investor education and awareness initiatives. Mutual Funds shall make complete disclosures in the half yearly trustee report to SEBI regarding the investor education and awareness initiatives undertaken. G. Harmonizing applicability of NAV across schemes 1. In partial modification to SEB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year shall be allowed subject to (i) compliance with Prevention of Money Laundering Act, 2002 and Rules framed there under; the SEBI Circular(s) on Anti Money Laundering (AML) and other applicable AML rules, regulations and guidelines and (ii) sufficient systems and procedures in place. 2. Repayment in the form of redemptions, dividend, etc. with respect to aforementioned investments shall be paid only through banking channel. J. Prudential limits and disclosures on portfolio concentration risk in debt-oriented mutual fund schemes 1. Mutual Funds/AMCs shall ensure that total exposure of debt schemes of mutual funds in a particular sector (excluding investments in Bank CDs, CBLO, G-Secs, T-Bills and AAA rated securities issued by Public ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sets under management and ratio of AUM to gross inflows on their respective website on an yearly basis. In case the data mentioned above suggests that a distributor has an excessive portfolio turnover ratio, i.e. more than two times the industry average, AMCs shall conduct additional due-diligence of such distributors. 2. Mutual Funds / AMCs shall also submit the data mentioned in paragraph 1 above to AMFI and the consolidated data in this regard shall be disclosed on AMFI website. N. Applicability of the Circular 1. All the paras except para D will become effective from October 1, 2012. 2. Para D of the circular will be effective from January 1, 2013. 3. Necessary amendments to the Regulations to give effect to the contents in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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