However, the mutual fund industry expects it to be set at a level which has a "marginal impact" on profitability, said one of the sources told Reuters.Īrbitrage funds that buy and sell securities frequently and hence have a higher tax burden, will be allowed to choose the second option, the sources added.īoth options were discussed with an internal committee finalising rules on July 21, according to the first source. The other option is to exclude brokerage and taxes but the investor fees will be lower, the sources said.Ī final decision will be taken after receiving feedback on the discussion paper. The regulator is now exploring an option to let mutual funds charge higher fees with all expenses, including brokerage and taxes paid by fund houses, Reuters reported quoting sources. The industry had made a presentation to the regulator in June, wherein the lobby argued that the original proposals would squeeze the profitability of almost all asset management companies (AMCs) by 20-80%, said the second source. In its original proposal, SEBI allowed fund houses to charge a maximum fee of 2.55% of the assets under management (AUM) with all expenses, including brokerage costs.
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