The Securities and Exchange Board of India (Sebi) on Tuesday formalised a graded exit load structure on liquid funds.
letter informed the Association of Mutual Funds in India (Amfi) that it approved of the proposal on graded exit loads made by the industry body.
According to the structure, one-day holding in liquid fund would draw an exit load of 0.007 per cent, two-day would lead to 0.0065 per cent exit load, followed by 0.006 per cent, 0.005 per cent, and so on, till seventh day.
in its communication said that since interest rate scenario can change overtime, the load structure should be reviewed annually by Amfi, in consultation with Sebi.
In its June board meeting, Sebi had announced levying of graded exit loads on liquid funds
upto period of seven days, to curb heightened investor inflows and outflows, which could hurt stability of such funds.