SEBI reduces initial cost of close-ended NFOs

PFW  Bureau / Jan 30

Securities and Exchange Board of India (SEBI) has approved the proposal for the removal of initial issue (New Fund Offers) expenses in the close-ended Mutual Fund schemes to reduce cost for the MF investors.

SEBI said in a statement that all mutual fund schemes shall meet the sales, marketing and other such expenses connected with sales and distribution of schemes from the entry load. The waiver of load for direct applicants will also be available in close-ended schemes, the regulator said.

“This would bring in more transparency and better upfront disclosures to the investors in terms of the expenses charged in close-ended schemes”, SEBI said.

Necessary amendments to the respective regulation are being issued.

Securities and Exchange Board of India (Intermediaries) Regulations, 2008

SEBI said that in the present regime a dozen regulations govern different categories of intermediaries. The broad framework of such regulations is similar to one another.

The new regulations seek to consolidate the common requirements and put in place a comprehensive framework which will apply to the intermediaries and prescribe the obligations, procedure, limitations among other things  in so far as the common requirements are concerned.

The new regulations seek to simplify procedures to make the registration or regulation process of intermediaries less burdensome and cost effective without diluting the regulatory oversight.

The SEBI board at its meeting held in Mumbai approved:
1) SEBI (Issue and Listing of Debt Securities) Regulations, 2008
2) SEBI (Public Offer and Listing of Securitized Debt Instruments) Regulations, 2008
3) SEBI (Intermediaries) Regulations, 2008, the release said.