Sebi board meet: Revised KYC norms, settlement framework

Market regulator Sebi held a high-profile board meeting on Tuesday, wherein it made a slew of key decisions. One major outcome was relief to foreign portfolio investors (FPIs). Sebi Chairman Ajay Tyagi confirmed that the regulator will release a revised circular on KYC norms for FPIs, based on the relaxations suggested by the HR Khan committee. 

Reportedly, FPIs will be allowed to trade in the Indian commodities market, “except sensitive ones.” Further, they might also be allowed to invest and manage a foreign fund.

Other than that, Sebi also announced major changes to the fee structure of the mutual fund industry. This decision will apparently slash profits of asset management companies but will undoubtedly bring cheer for investors. 

The total expense ratio (TER) has been capped at 1.05% for equity assets more than Rs50,000cr. The cutting down on total expense ratio of MFs will purportedly save investors money in the Rs1,300-1,500cr range. Due to this however, the profitability of large fund houses, like HDFC MF and Reliance Nippon MF, will be hit by up to 12%.

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