MF Update: Now check TER daily

Market regulator SEBI has ordered mutual fund houses to disclose the total expense ratio (TER) of each scheme under both direct and regular plans on a daily basis.

For this, the fund houses need to introduce a separate tab on their website as ‘Total Expense Ratio of Mutual Fund Schemes’ which should be available as a downloadable spreadsheet on the website of AMFI as well, directed SEBI.

This move comes after SEBI observed that TER of MF schemes changes frequently. In addition, the regulator also found that few AMCs do not even intimate investors about such changes.

To comply with this new guideline, fund houses are now expected to intimate all the investors by sharing a notice through email or SMS prior to making any revision to the TER of a scheme. In addition to this, AMC’s are expected to put a notice of change in base TER on their website. Till now, fund houses have been disclosing the change in TER on their website within two working days after making such changes.

Another key development in this circular is the change in the format of TER disclosure on a scheme information document (SID). Below is the new format of disclosing TER on scheme information document. The circular has come into force immediately.