The markets watchdog, in 2012, had allowed such TER (total expense ratio) for inflows from beyond top 15 cities (B15 cities) in order to increase penetration of mutual funds in such towns.
"Since more than five years have elapsed and on review, it is now decided that the additional TER of upto 30 basis points would be allowed for inflows from beyond top 30 cities instead of beyond top 15 cities," the Securities and Exchange Board of India (Sebi) said in a circular.
This would be applicable effect from April 1, 2018, it added.
B15 cities are those which are beyond these top 15 cities - New Delhi (including NCR), Mumbai (including Thane and Navi Mumbai), Kolkata, Chennai, Bengaluru, Ahmedabad, Baroda, Chandigarh, Hyderabad, Jaipur, Kanpur, Lucknow, Panjim, Pune and Surat.
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Separately, Sebi has said that asset management companies (AMCs) would not be eligible to charge additional expenses of upto 0.20 per cent, in the daily average net assets on MF schemes from investors. This will be applicable on mutual fund schemes including close ended, wherein exit load is not levied.
Further, existing mutual fund schemes including close ended schemes, wherein exit load is not levied, would discontinue, with immediate effect.
Overall, the assets base of the mutual fund industry, comprising 42 active players, stood at over Rs 22 lakh crore.