SEBI mulls discussion paper on total expense ratio on MFs

The Securities and Exchange Board of India is planning to come out with a discussion paper on the total expense ratio or TER on mutual funds.

SEBI's whole time member G Mahalingam was addressing 12th edition of CII Mutual Fund Summit held in Mumbai today.

He further said SEBI has been working on measures to bring down the cost on mutual fund investors and a discussion paper will be put out seeking industry and stakeholders view.

The market regulator is also examining the Uday Kotak Committee report on Corporate Governance for relevant recommendations that can be implemented in mutual fund industry.

When asked about bringing down costs, UTI Mutual Fund’s MD Leo Puri said the call on expense ratio should be left to the market forces rather being debated at the regulatory level.

Expense ratio may not be an issue for an investor who is looking for a higher alpha provided the fund house can deliver it. While for conservative investors, there are exchange traded funds and fixed income schemes which carry low expense ratio, he said.