SEBI Mutual Fund Advisory Committee, comprising SEBI (Securities and Exchange Board of India) and mutual fund industry representatives, in a meeting recommended retaining the expense ratio at 2.25 per cent; which mutual funds deduct annually from investors net assets value (NAV). Currently, the expense ratio for the mutual fund industry is capped at this level. The panel has also decided to make disclosure norms more transparent for investment in equity options. Equity options are derivative products where investors bet on the future value of stocks or their indices and SEBI is against mutual funds getting into the hedging business, as they could suffer losses. Hence, mutual funds may also have to provide more disclosures regarding investment in equity derivatives.
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