SEBI suspended the B30 commission scheme for mutual funds due to misuse by distributors through churning of investments and improper calculation methods to generate higher income. SEBI proposed uniform expense ratios for all equity funds to curb misselling and shifting of funds to more expensive schemes for higher commissions. SEBI will introduce 5 new subcategories for ESG themed mutual funds covering exclusions, integration, impact investing and sustainable objectives to allow AMCs to launch more diversified ESG funds.

1. Weekly
News
06th March 2023
© RightFocus Investments Pvt. Ltd.
SEBI Registered Investment Adviser (INA200006628)

2. Snapshot
SEBI Suspends B30
Commissions
SEBI Proposes Uniform
Expense Ratios to Curb
Mis selling
SEBI to Introduce 5 New
Subcategories for ESG
Funds
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© RightFocus Investments Pvt. Ltd.
SEBI Registered Investment Adviser (INA200006628)
Weekly Market News
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Other News

3. Weekly Market News
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SEBI Registered Investment Adviser (INA200006628)
Index % Change
(Last week)
% Change
(yearly)
Nifty 50 1.7% 8.8%
Nifty Midcap 150 2.8% 12.6%
Nifty Small Cap 250 2.7% 3.8%
Nifty IT 0.3% 12.1%
Nifty Bank 2.3% 20.4%
Nasdaq 100 2.7% 12.4%
S&P 500 1.9% 5.4%
Dow Jones 1.8% 0.7%
Nifty Pharma 0.6% 6.2%

4. SEBI Suspends B30 Commissions for Mutual Funds
© RightFocus Investments Pvt. Ltd.
SEBI Registered Investment Adviser (INA200006628)
 The B30 scheme allows MFs to charge a commission of up to 30 basis points over and above the
expense ratio if a certain portion of their AUM came from B30 regions.
 SEBI suspended the scheme due its misuse by distributors to generate higher income.
 SEBI observed the B30 scheme was exploited through churning of investments, splitting of transactions
and utilization of improper methods to calculate B30 incentives.
 The scheme is to remain suspended until AMCs and Distributors implement necessary safeguards to
halt further misuse of this scheme.

5. SEBI Proposes Uniform Expense Ratios For Mutual Funds
to Curb Mis Selling
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SEBI Registered Investment Adviser (INA200006628)
• This means that AMCs will have to charge the same expense ratio for all equity funds irrespective of scheme
size or type.
• At present mutual funds have the liberty to set their fees depending on the type of scheme.
• The proposal aims to discourage distributors from recommending clients to shift money from existing
schemes to new schemes ( which may be more expensive) to earn higher commissions.
• As per industry estimates, over 20% of the MF industry’s AUM moved to costlier equity NFOs in the previous
year.

6. SEBI to Introduce 5 New Subcategories for ESG
Themed Mutual Funds
© RightFocus Investments Pvt. Ltd.
SEBI Registered Investment Adviser (INA200006628)
• The 5 new subcategories are: Exclusions, Integration, Best-in-Class & Positive
Screening, Impact Investing & Sustainable Objectives.
• At present, AMCs can launch only 1 ESG fund under the thematic category.
• Given that AMCs may want to launch multiple diversified ESG schemes, SEBI proposed
that each AMC be allowed to launch 1 ESG scheme under the 5 subcategories.
• The proposal is to be made mandatory from April 1, 2023.

7. Other News
© RightFocus Investments Pvt. Ltd.
SEBI Registered Investment Adviser (INA200006628)
• Bajaj Finserv receives its SEBI license to commence its Mutual Fund business.
• Adani Ports & Special Economic Zone has repaid Rs.1000 crores to SBI Mutual Fund
and Rs.500 crores to Aditya Birla Sun Life Mutual Fund as per schedule on commercial
papers that matured on Feb 20th, 2023. SBI confirmed it has no further exposure in Adani
Group.
• Reliance Industries plans to set up a 10-Gigawatt solar project in Andhra Pradesh.

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