SEBI aims to make mutual funds more cost effective

To make the mutual fund investments more attractive and affordable, market regulator is aiming to push for digitalization. SEBI will take measures to bring cost-effectiveness by promoting go green initiatives through online transactions.

Recently, the market regulator has also taken measures to bring uniformity in various aspects of the mutual fund industry in the areas of the governance, risk management, due diligence process etc. Further, the market regulator is aiming to increase the penetration through technology-based initiatives as well as through various digital mediums.

In the recent past, the market regulator SEBI reduced the additional expenses charged by mutual fund houses from 20bps to 5bps. One basis point is the hundredth of a percentage point. This move was aimed at reducing the cost of the mutual fund investment which in-turn meant lesser commission to distributors.

In its Annual Report 2017-18, SEBI had mentioned about promoting the go-green initiative for the mutual fund industry. During the year 2017-18, the Indian mutual fund industry witnessed an exceptional growth both in terms of inflows and asset base.

The strong inflows into the mutual fund industry were led by a strong participation from retail investors. Also, an increased awareness about mutual funds has taken the total assets under management for the industry to new highs of around 23 lakh crore in the July 2018.