Cap on expenses for FoF schemes, additional details in offer documents

SEBI vide press release PR No.122/2010 dated May 19, 2010 has announced the decisions of the board meeting of SEBI held on the same day.

Offer documents to contain additional details

The offer documents of companies raising capital should also contain disclosures from directors as to whether they were directors of any company when the shares of the said company were suspended from trading by stock exchange(s) for more than 3 months during last 5 years or delisted.

Cap on expenses for Fund of Funds (FoF) schemes

SEBI has decided that the FoF schemes may either (i) charge annual expenses based on the provisions under regulation 52 (6) of SEBI (Mutual Funds) Regulations, 1996 relating to fees and expenses including management fee, or (ii) charge total expenses not exceeding 2.50 per cent of the average of net assets, consisting of management fees not exceeding 0.75 per cent of the average of net assets, other expenses relating to the FoF scheme, and charges levied by the underlying schemes.

Regulation 52 (6) states that in case of an FoF scheme, the total expenses of the scheme including the management fees shall not exceed 0.75% of the daily or weekly average net assets, depending upon whether the NAV of the scheme is calculated on daily or weekly basis.

FoF scheme is a mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds.

A copy of the press release is available here.