SEBI proposes to scrap extra 5bps fee on mutual funds
SEBI—the body that regulates India's stock markets—is planning some major updates to how mutual fund fees work, aiming to make things clearer and cheaper for investors.
The headline move: scrapping the extra 5 basis points (bps) fee that fund houses usually charge, which should make life simpler for everyone investing in mutual funds.
SEBI is also inviting public feedback on these proposals until November 17, 2025.
What else is changing?
SEBI wants to keep statutory charges like STT, GST, and stamp duty out of the Total Expense Ratio (TER) limits (though GST on management fees will still count).
They're also slashing brokerage charges—from 12 bps down to 2 bps for cash trades and from 5 bps to just 1 bps for derivatives.
Plus, fund houses may soon have to be much more upfront about all their fees.
All these tweaks are meant to protect investors and make mutual funds more cost-effective—definitely a win if you're thinking about investing!