Single fund manager for commodity, overseas funds to reduce costs for MFs: Industry expert
Sebi's proposal of allowing mutual fund houses to have a single fund manager to oversee commodity and foreign investments is aimed at reducing the cost of managing the fund, a top official of Anand Rathi Wealth said on Tuesday. Sebi, on Friday, came out with a consultation paper proposing measures to support ease of doing business for Mutual Funds (MFs).
In the draft paper, the regulator suggested appointing a single fund manager for domestic and overseas/commodity funds, relaxation of nomination requirement for joint holders and streamlining of prudential norms for passive schemes with respect to exposure to a single issuer within the AMC's group companies.
This came after the Finance Minister in the FY24 Budget made an announcement to simplify, ease and reduce cost of compliance for participants in the financial sector through a consultative approach.
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«The appointment of a single fund manager for domestic and overseas/commodity funds is intended to reduce the cost of managing the fund,» Anand Rathi Wealth Ltd Deputy CEO Feroze Azeez said.
Sebi noticed that the appointment of dedicated fund managers leads to additional costs for Asset Management Companies (AMCs) in terms of employing two fund managers.
Moreover, AMCs already hire research analysts tracking assets classes such as at each sector level, irrespective of the same being a domestic or overseas investment.
Therefore, the current provision with
