DEPUTY GENERAL MANAGER

INVESTMENT MANAGEMENT DEPARTMENT

SEBI/IMD/CIR No. 11/115723/08

January 31, 2008

All Mutual Funds Registered with SEBI

Association of Mutual Funds in India (AMFI)

Dear Sirs,

Sub: Removal of Initial issue expenses

Currently close-ended schemes are permitted to charge initial issue expenses and not charge entry load. In order to bring in more transparency and clarity to the investors in terms of the expenses charged to them in closed-end schemes, SEBI Board in a recent meeting decided as under:

1. Henceforth, there will not be any provision of charging initial issue expense and amortization of the same.

2. All mutual fund schemes shall now meet the sales, marketing and other such expenses connected with sales and distribution of schemes from the entry load.

This circular would be applicable to all mutual fund schemes launched after the date of the circular.

Please note that the necessary amendments to SEBI (Mutual Funds) Regulations, 1996 in this regard would follow.

This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Yours faithfully,

Ruchi Chojer

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