By Khawaja Salman
Central Depository Company has significantly reduced its service tariff for the Mutual Fund Industry up to 57% applicable to different categories of funds. Apart from the said reduction, CDC has also rationalized the trustee fee for small sized mutual funds/ schemes by permanently eliminating the minimum fee component and implementing flat rate instead of slab system.
This reduction has been effective from July 01, 2019 and is expected to facilitate Asset Management Companies in making their funds/ schemes more investment-worthy in the current challenging times.
This is not the first time CDC has reduced its service tariff. In fact, in the past, the tariffs for depository services (both custody and transaction fee) and trustee services have been reduced a number of times. The current reduction compliments a number of CDC’s earlier contributions in the development of the Mutual Fund Industry including its state-of-the-art Fund Management System which has enabled the industry to implement Straight Through Processing (STP) from AMCs to Banks and also helps ensure compliance with relevant regulatory framework.
Commenting on this occasion, CEO-CDC Badiuddin Akber said, “Despite challenging market conditions, rising inflation and significantly enhanced role of trustee in the last few years, this endeavour is in line to CDC’s resolve to increase ease of doing business through automation, introduce risk management measures and reduce the cost of doing business for its clients. Our substantial investments in acquiring latest technology and constant refinement of business processes have enabled us to handle greater volumes in a cost effective manner and provide relief to our customers.”