Mutual funds resist Sebi’s performance-linked fee

Mutual funds are pushing back against the Indian market regulator's proposal to introduce a fee linked to performance, arguing that continuous churn in a massive and diverse investor base makes such a calculation extremely complex.

- Apoorva Ajith & Srushti Vaidya

The Securities and Exchange Board of India (Sebi) announced a proposal on 28 October requiring mutual funds to charge a performance-based expense ratio in each scheme, along with other measures to revamp regulations in the sector.

Some fund houses have individually submitted feedback to Sebi on the complexities of charging a performance fee, six people aware of the matter told Mint. A discussion on the matter at the Association of Mutual Funds in India (Amfi) level has yet to happen, three of them said.