Sebi fines Nippon Life India Asset Management, trustee in charging TER to AMC books case

Markets regulator Sebi on Thursday imposed a penalty of Rs 3 lakh on Nippon Life India Asset Management Ltd and Nippon Life India Trustee Ltd in the matter of charging total expense ratio (TER) to asset management company books.

Individually, the regulator levied a fine of Rs 2 lakh on Nippon Life India Asset Management and Rs 1 lakh on Nippon Life India Trustee.

They have been directed to pay the amount within 45 days, according to an order passed by the Securities and Exchange Board of India (Sebi).

During examination it was observed from the TER structure of Nippon Life India Asset Management that in 5 ETFs the fund house charged less expense to the schemes as against actual expense incurred by the schemes. Therefore, the fund house by bearing excess expenses of the scheme has allegedly violated the rules.

Further, the trustee did not ensure compliance by the fund house. "The Noticee 1 (Nippon Life India Asset Management ) by bearing excess expenses of the scheme from the books of the AMC has violated the provisions of ... Sebi circular dated October 22, 2018 which requires that all scheme related expenses shall necessarily be paid from the scheme only within the regulatory limits and not from the books of the AMC, its associate, sponsor, trustee or any other entity through any route," the regulator said.