+919998510543

News Details

News Details

Hot Pursuit News
As on 29-Oct-2025  11:45

AMC stocks edge lower after SEBI proposes changes to industry's fee structure

Motilal Oswal Financial Services (down 7.42%), Nippon Life India Asset Management (down 5.55%), HDFC Asset Management Company (down 4.82%), Aditya Birla Sun Life AMC (down 4.11%), Canara Robeco Asset Management Company (down 3.99%), Nuvama Wealth Management (down 2.87%), UTI Asset Management Company (down 2.22%) and Angel One (down 2.03%) edged lower.

A widespread market selloff was triggered by investor anxiety over SEBI's new proposals aimed at reducing costs for mutual fund investors, specifically by lowering expense ratios and capping brokerage fees.

SEBI's proposals primarily focus on two areas to improve investor returns.

First, the regulator plans to reduce the expense ratio'the fee covering fund management costs'particularly for schemes with large assets under management (AUM).

Additionally, SEBI intends to remove the extra five basis points currently permitted across all schemes, calling the charge transitory, and has proposed linking expense ratios directly to fund performance to better align fund manager and investor interests.

Fund houses must also separate any non-mutual fund activities into distinct business units. Second, the regulator suggested dramatically reducing the cap on brokerage and transaction charges.

Currently, mutual funds can charge up to 12 basis points for cash market trades and 5 basis points for derivatives, but SEBI proposes lowering these to 2 basis points and 1 basis point, respectively, to address concerns over double charging for research and execution costs.

While these changes are intended to enhance transparency and boost investor returns, they are widely expected to reduce the revenues of asset management companies (AMCs), particularly those with large AUMs or significant operational leverage.

Powered by Capital Market - Live News