SEBI on May 18, 2023 has issued a Consultation Paper on Review of Total Expense Ratio charged by Asset Management Companies (AMCs) to unitholders of schemes of Mutual Funds to facilitate greater transparency and accrual of benefits of economies of scale to investors to solicit public comments / views on the changes proposed regarding fees and expenses charged by AMCs to unitholders of mutual fund schemes, under Regulation 52 of SEBI (Mutual Funds) Regulations, 1996 (“MF Regulations”) to facilitate greater transparency and accrual of benefits of economies of scale to investors.
It is proposed to allow AMCs to obtain limited purpose membership with stock exchanges for executing trades for own mutual fund schemes. However, the choice of obtaining limited purpose membership should rest with AMCs and desirous AMCs may voluntarily undertake trading activities, which will enable them to reduce expenses towards brokerage and transaction cost. Further, exercising this choice of obtaining limited purpose membership shall help in preventing instances of misuse of information and market abuse including front running.
