Review of additional expenses of up to 0.30% towards inflows from beyond top 15 cities (B15)
Summary
SEBI modifies existing regulations to allow an additional Total Expense Ratio (TER) of up to 30 basis points for mutual fund inflows originating from beyond the top 30 cities instead of the previous top 15 cities. This change aims to further increase the penetration of mutual funds in smaller towns and cities, effective from April 1, 2018. The circular explicitly amends specific paragraphs of prior SEBI circulars dated 2012 and 2014 to reflect this geographical expansion.
Text
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, 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.
the additional TER of upto 30 basis points would be allowed for inflows from beyond top 30 cities instead of beyond top 15 cities.
para A of SEBI circular CIR/IMD/DF/21/2012 dated September 13, 2012; (ii) para A(1)(b) and Annexure A1 mentioned at para A(2) of SEBI Circular CIR/IMD/DF/05/2014 dated March 24, 2014, are modified, whereby at all relevant places, the terms “15 cities”, “T15” and “B15” would be substituted with “30 cities”, “T30” and “B30” respectively.
This circular shall be applicable with effect from April 1, 2018.
This circular is issued in exercise of the powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act 1992, read with the provision of Regulation 77 of SEBI (Mutual Funds) Regulation, 1996.
Source: SecMarx — Review of additional expenses of up to 0.30% towards inflows from beyond top 15 cities (B15). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.