In a letter sent to AMFI, SEBI has today confirmed that fund houses can levy graded exit load on investors of liquid funds, who exit the scheme within 7 days.
This essentially means fund houses can impose exit loads in liquid funds to the extent of 7 days. However, such loads will be reduced with the increase in days. Simply put, investors redeeming after a day will have to pay more exit load than the investors redeeming it on seventh day.
While fund houses can impose exit load of 0.007% if an investor redeems his money in 1 day, there will be no loads from seventh day onwards.
Here is the table on levy of exit load on a graded basis
|Investor exit upon subscription||Exit load as a % of redemption proceeds|
This has come into effect from October 19, 2019.
SEBI has also set the cut off timing in liquid funds 1.30 pm instead of 2 pm with effect from October 21, 2019.