New mutual fund schemes with performance-based fee on the anvil

Proposal being reviewed by a working group formed by Sebi

The Securities and Exchange Board of India (Sebi) is considering a proposal to allow mutual funds (MFs) to charge a fee based on their performance, said Ananta Barua, whole-time member of the markets regulator. He said the proposal is being reviewed by a working group formed to look into cost structures.

“One working group has been set up which is going to review... One of the suggestions is that if any scheme or fund is performing well above the benchmark, it (fee) can be linked to its performance. When the committee finds merit, we can take it through a consultation