Securities and Exchange Board of India has announced that fungibilty of total expense ratio (TER) for the mutual fund scheme will be allowed from October 1.

The regulator’s board, in its meeting on August 16, decided to allow fungibility of TER to accord flexibility and bring about cost effectiveness. At present on a ceiling of 2.25 per cent total expense ratio, one per cent is the sub-ceiling for management fee while rest is for the operating expenses. Now, if flexibility is provided, there will be no such sub-ceilings.

Market for MSME

Speaking on the occasion of launch of NSE’s SME platform, SEBI Chairman U.K. Sinha said, “A few measures (as approved by the SEBI board) will be made effective from October 1 as these require amendments in existing regulations.” These include fungibilty and charging back of the exit load.

Talking about the special platform for Micro, Small and Medium Enterprises (MSME), Sinha assured that enough provisions have already been made to make issues of these units good for the investor. Sinha informed that there is also a migration provision.

This means compliant companies on MSME platform can be listed on the national exchanges. The SEBI Chairman also said the market regulator is willing to come up with fresh measures to ensure that listed companies comply with minimum public shareholding norms. “If there is a demand (from corporates) and we feel the demand is genuine, then we are ready to come out with more avenues (to meet minimum shareholding norms),” Sinha told reporters.

SEBI has directed promoters of all listed private sector companies to ensure they comply with minimum public holding of 25 per cent by June 2013 while for listed public sector companies minimum public shareholding of 10 per cent has to complied with by August, 2013.

shishir.sinha@thehindu.co.in

(This article was published on September 18, 2012)
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