Multiple choice

If the average annual assets of an equity mutual fund scheme are Rs.1, 000 Crore, then what is the maximum amount of annual recurring expenses chargeable as per SEBI guidelines?

  1. Rs. 6 Cr

  2. Rs. 20.50 Cr

  3. Rs. 23.25 Cr

  4. As per actual expense
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

For equity mutual funds with annual assets up to Rs.1,000 crore, SEBI permits maximum recurring expenses of 2.25% of average annual assets. Therefore, 2.25% of Rs.1,000 crore equals Rs.22.5 crore. Option B (Rs.20.50 crore) appears to reflect the 2.05% rate which was applicable under earlier regulations. This represents the maximum allowed, not actual expenses. The other options don't align with SEBI's expense ratio limits.

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