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SEBI proposes cuts to mutual fund expense ratios to boost transparencySEBI proposes cuts to mutual fund expense ratios and brokerage fees to boost transparency and simplify investor charges, a move that may mildly pressure AMC stocks.By CNBCTV18.com October 28, 2025, 10:01:13 PM IST (Published)2 Min ReadIndia’s markets regulator has proposed reducing mutual fund expenses and overhauling fee structures to make costs more transparent and investor-friendly, according to a consultation paper released Tuesday on its website.

The Securities and Exchange Board of India (SEBI) has suggested lowering total expense ratios (TER) by up to 0.15% for open-ended mutual funds and up to 0.25% for closed-end schemes. The regulator also said fees must clearly exclude brokerage, taxes and other transaction costs, and their break-up must be disclosed upfront.

This represents a shift from SEBI’s 2023 framework that tried to include such charges within the overall expense ratio. That earlier approach drew pushback from asset managers overseeing ₹75.61 trillion ($860.23 billion) in investor assets.

Brokerage fee caps have also been proposed to be sharply reduced. Cash market brokerage would be limited to 2 basis points from the existing 12 basis points, while derivative transactions would see a cut from 5 basis points to 1 basis point.

SEBI said asset managers may opt for a performance-linked differential fee structure. It also proposed ring-fencing mutual fund operations by requiring fund houses to run any non-MF businesses through separate units, with complete segregation of key employees.

Analysts said the move could weigh slightly on AMC stock sentiment, though it strengthens governance and transparency for investors.Continue ReadingCheck out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!Tagsexpense ratiomutual fundsSEBI