Asset Management Companies (AMCs) will now have to invest in their mutual fund schemes (MF plans) on an asset basis. These companies will have to invest between 0.03 to 0.13 percent in their plan. SEBI had earlier ordered that asset management companies (AMCs) will have to invest in their plans to harmonize the interests of the fund house with those of investors. However, it had not said earlier how much investment the asset management companies would need to invest in the plans of their fund houses.
Minimum 0.3 percent investment has to be done in low risk category
On August 5, SEBI had amended the mutual fund rules, asking fund houses to invest in their schemes based on the risk level. It was said that it will come into force on the 270th day from the date of notification. Based on the assigned risk value as per the scheme, AMCs will invest a minimum amount of 0.3 per cent of the Asset Under Management (AUM) in their schemes. However, SEBI did not specify the minimum amount to be invested by the fund house at that time. Meanwhile, SEBI in a circular on Friday said that “in case of low-risk category schemes, the AMC will have to invest at least 0.03 per cent of the AUM in the scheme in its plan.
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0.09% investment required in high risk scheme
The SEBI circular states that in low to moderate risk category plans, AMCs will have to invest 0.05 per cent of their asset base. At the same time, 0.07 of the asset base will have to be invested in a plan with moderate risk. Moderate to high risk schemes will have to invest 0.09 per cent of the asset base, while high risk schemes will have to invest 0.11 and very high risk schemes will have to invest 0.11 per cent.