To reduce overall cost of transactions, Sebi on Saturday decided to lower broker fees by 25 per cent to Rs 15 per transaction of Rs 1 crore as part of calibration of various other fees collected by the regulator from different market intermediaries. The Sebi board has decided to give an option to all market intermediaries and companies to make their regulatory payments in digital mode. The move would help in speedy and easy transactions, while reducing failures due to payment gateway issues. Besides, the board has approved a proposal to levy certain new charges, including filing fee for draft scheme of arrangements and processing fee on application for relaxation in certain regulations.
“Keeping this objective in mind and taking into consideration the projected income and expenditure of Sebi for the next three financial years, the board decided to reduce the fees payable by broker by 25 per cent from Rs 20 per crore of turnover to Rs 15 per crore of turnover,” Sebi said in a statement after its board meeting.
It has been a long pending demand of broker and market participants. “This will result in reduction of overall cost of transactions and will benefit the investors and promote the development of securities market,” the regulator said.
The regulator has been following the practice of calibrating the fees either upwards or downwards as per its requirements so as to keep a balance between the financial resources required to ensure regulatory efficiency while maintaining reasonableness to avoid any undue burden on any particular class of intermediaries.
Sebi has decided to levy a filing fees on draft scheme of arrangements on the lines of amount charged for placing offer documents. Sebi observed that similar work and allocation of resources are involved in respect of processing of draft schemes of arrangements as it is for offer documents.
Further, it has decided to charge fee for application under buyback regulations and impose a processing fee on an application for relaxation of strict enforcement of Sebi’s ICDR (Issue of Capital and Disclosure Requirements) regulations. Currently, no fee is being charged for processing of such requests. The board has revised upwards the fee charged under Substantial Acquisition of Shares and Takeovers (SAST) Regulations to Rs 5 lakhs from Rs 3 lakh.
Besides, the Board approved the proposal to amend various Regulations to enable the market participants to make payments to Sebi through digital mode as well. The move comes following the demonetisation of high-value currency by RBI in November.
Many of the intermediaries such as brokers, Foreign Portfolio Investors (FPIs), stock exchanges, custodians make payments to Sebi through online banking. However, certain receipts such as filing fees for IPOs, takeover fees, payment from mutual funds are still received through cheques and demand drafts.
Further, option of online payment from market intermediaries is not available in the respective regulations.
... Lets MFs invest in REITs, get celebrity endorsements
To increase awareness of mutual funds as a financial product, Sebi on Saturday allowed celebrities to endorse the instrument at industry level and issued new advertising code that will require fund houses to communicate in a simple manner with the public. The Sebi board has also decided to allow investment by mutual funds in REITs and InvITs. The move is likely to help in attracting more number of investors into Real Estate and Infrastructure Investment Trusts.
Also, it issued new advertisement code for mutual funds so that performance related information should be disclosed in a simple and effective manner, while providing precise and latest information to investor. At its board meeting here, Sebi allowed investment by mutual funds in REITs and InvITs saying the units of such trusts are hybrid instruments.
A mutual fund would be permitted to invest only up to five per cent of its net asset value in units of a single issuer of REITs and InvITs. However, such limit would not applicable for investments in case of index fund or sector or industry specific scheme pertaining to REITs and InvITs.
The limit would be 10 per cent of its NAV in units of REITs and InvITs. These caps would not be applicable in case of index funds. Sebi has deliberated the proposals relating to review of existing advertisement guidelines for mutual funds. It considered the existing guidelines on publishing performance of schemes in advertisements issued by mutual funds should be reviewed. Performance of MF schemes should be advertised in terms of CAGR for the past one year, three years, five years and since inception, in place of current requirement to publish scheme’s returns for as many as 12-month periods as possible for the past three years.
Besides, performance advertisement of mutual fund schemes should provide information based on last day of month-end preceding the date of advertisement, instead of current requirement of publishing such data based on last day of preceding quarter-end.
Performance of other schemes managed by the fund manager should be disclosed in a summarised manner. Sebi has permitted to mutual funds to provide an exact link to such summarised information.