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
Day 1 0.007
Day 2 0.0065
Day 3 0.006
Day 4 0.0055
Day 5 0.005
Day 6 0.0045
Day 7 0

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.

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