SEBI board to revise TER disclosure rules for mutual funds and FPIs

The shortening of the time frame for listing shares after the closure of an initial public offering (IPO) is a topic SEBI board will be discussing. As of right now, six days after the IPO closes, the listing period will begin. Nevertheless, there were hints that SEBI would think about shortening it to three days.

Today, the Securities and Exchange Board of India (SEBI) held its board meeting to discuss a number of important issues, which is a significant development for the Indian financial industry. The revision of rules governing the total expense ratio (TER) for mutual funds (MFs) and disclosures for foreign portfolio investors (FPIs) was one of the main items on the agenda, according to sources close to CNBC-TV18.

Total expenditure ratio, or TER for short, is a term used to describe the overall expenses incurred by mutual funds when administering and running a mutual fund scheme. It includes a variety of costs, such as administrative fees, fund administration costs, and other operational expenditures.


In the past, SEBI has published a consultation document outlining ideas for rationalising TER in mutual funds. In contrast to the scheme level, the report recommended that TER be determined at the asset management company (AMC) level. This strategy tries to present a more comprehensive picture of the costs spent by mutual funds.

The consultation document also made the suggestion that TER could include further elements such advisory fees, the goods and services tax (GST) on investments, and securities transaction tax (STT). It is possible to have a more thorough knowledge of the expenses connected with mutual funds by considering these components in the TER computation.

The disclosure requirements for foreign portfolio investors who are considered to be “high-risk” were another key recommendation in SEBI’s consultation paper. The report states that FPIs would be categorised as “high-risk” FPIs if they held more than 50% of a group or invested more than Rs 25,000 crore in the Indian equities market. It is anticipated that the restrictions will be tightened in this instance. The SEBI board was scheduled to talk about the shortened deadline for listing shares after the initial public offering’s (IPO) closure in addition to the aforementioned issues. The listing window currently extends six days after the IPO closes. There were hints, though, that SEBI would think about shortening it to three days.

The timescale for listing shares after an IPO might be shortened if it is put into effect, which would speed up the listing process, enabling businesses to access funds more rapidly, and possibly increase investor interest. Market participants, government officials, and investors are all anticipated to closely monitor SEBI’s judgement on these issues. The conclusion of the board meeting will offer insightful information on the future course of the Indian financial sector and its regulatory framework.