Sebi considering performance-linked incentives for mutual funds

The Securities and Exchange Board of India(Sebi) on Wednesday said a proposal to allow a new category of mutual fund schemes where charges will partly be linked to performance is being examined.

"A working group has been set up which is going to review. One of the suggestions is that if any scheme or fund is performing well above the benchmark, fees can be linked to their performance. If the committee finds any merit then the proposal can be taken for further discussion through a consultation paper," Ananta Barua, whole time member, Sebi, said at the CII Mutual Fund Summit.

Barua said a performance linked incentive is part of various other proposals, related to the total expense ratio, being reviewed by the regulator.


The regulator also said it has asked asset management companies to suspend the small- town linked incentive structure.