The Securities and Exchange Board of India reconditioned the fee structure that mutual funds charge from investors, by issuing new norms in which the total expenses for investment in such funds are capped at 2.25 per cent.

SEBI said that the new fee structure, in which the total expenses ratio is readjusted, would come into force from April 1, 2019. The total expenses ratio is the fee that mutual funds collect from investors every year to manage their money.

The SEBI in a notification published on December 13, announced that the maximum total expense ratio (TER) for closed-ended equity schemes are capped at 1.25 per cent and other than equity schemes are capped at 1 per cent. The notification also said that the maximum TER for open-ended equity schemes will be 2.25 per cent and 2 per cent for other open-ended schemes.

The market regulator also declared that the equity schemes will have to invest a minimum of 65 per cent of its net assets in equity and equity-related instruments. The regulator has made amendments to the SEBI’s mutual fund regulations.

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