Sebi Chief says additional expenses charged on mutual funds to be slashed

In a relief to mutual fund investors, Securities and Exchange Board of India (Sebi) Chairman Ajay Tyagi said the additional expenses charged on mutual funds will be reduced. Tyagi announced to lower the expense charges from 20 basis points (bps) to 5 bps, which will help in lowering the investment cost that was likely to increase after the re-imposition of long term capital gains (LTCG) tax. In 2012, the Sebi had permitted mutual funds to charge 20 basis points of assets under management of the scheme in lieu of exit loads, or the sum mobilised from investors when they offload holdings.

Stock exchanges will introduce shared co location facility so more brokers can benefit, Tyagi said further. He also said the Sebi has partially accepted the recommendations made by Uday Kotak committee on corporate governance. Market regulator made significant announcements on corporates and F&O front too.

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Here are the key highlights:

• Kotak Committee's 40 recommendations accepted without modification
• Stock exchanges to introduce shared co location facility so more brokers can benefit
• Exchanges to provide tick-by-tick data free
• Physical settlement of all stock derivatives shal be carried out in phased manner
• Companies with market wide position limit and medium quarter sigma order size revised to rs 500 cr and rs 25 lac from existing rs 300 cr and 10 lac
• Stocks which are currently in derivatives but fail to meet the new criteria would be settled physically
• Stocks which meet new criteria shall be cash settled
• On Companies under IBC, SEBI said , we need consultation before forming new rules