Sebi scraps entry load for MFs, cuts fees of intermediaries

The Securities and Exchange Board of India has rationalised disclosure norms for rights issues. The market regulator has allowed investors to choose commission payable to mutual fund distributors and has cut fees for financial intermediaries by 50%. It has also approved the concept of anchor investor. CNBC-TV18 was the first to report these changes on June 16.

The Sebi board which met today approved the concept of anchor investor, which are long-term strategic investors. An anchor investor has to be a qualified institutional buyer and can subscribe up to 30% of the institutional quota. The promoter group cannot be an anchor investor. There will also be a 30-day lock-in period for anchor investors.

On rights issue:

The Sebi board has also rationalised disclosure norms for rights issues. Henceforth, there will be no preferential issue for superior voting rights. Also, no listed company can issue shares with superior rights.

On mutual fund schemes:

Mutual fund investors have a reason to cheer. There will be no entry load on any mutual fund schemes from now on. Distributors will now have to disclose commission for schemes. In a landmark move, mutual fund investors will now decide on the commission payable to distributors.

Fee cut for intermediaries:

The board has decided to rationalise the fees charged by intermediaries. It plans to cut fees for financial intermediaries by 50%. Broker fees for debt deals have been cut to Rs 2.5 per Rs 1 crore of turnover.

On initial public offerings: From here on, companies planning an initial public offering will have to list on at least one national exchange.

ICICI Pru Target Returns-Reg(G) : NFO

Target Returns Fund

Objective: To generate capital appreciation by investing in equity or equity related securities of large market capitalization companies constituting the BSE 100 index and providing investors with options to withdraw their investment automatically based on triggers for preset levels of return as and when they are achievedHowever, there can be no assurance that the investment objective of the Scheme will be realized.

Benchmark Index BSE-100
Fund Manager Sanjay Parekh
Category Equity – Large-cap
Initial Offer Price (Rs.) 10
Minimum Investment (Rs.) 5000
Additional Investment (Rs.) 1000
Entry Load : 2.25% of applicable NAV For an Investment of less than Rs. 2 Crores., Nil for For an Investment of Rs. 2 Crores and above
Exit Load : 1.5% for an investment amount of less than Rs. 2 Crores if exited before 6 months from the date of allotment of units.,1% will be charged if exited after 6 months but before 12 months from the date of allotment of units., No load will be charged if exited after 12 months from the date of allotment