Context
The Securities and Exchange Board of India (SEBI) has reviewed and updated decades-old brokerage and mutual fund regulations with the objective of reducing costs for investors, improving transparency, and simplifying market rules. The decisions were taken in SEBI’s board meeting.
Changes brought by SEBI
• Mutual fund expense ratio reduced by up to 15 basis points.
Benefit: Investors pay less fees, so their returns increase over time.
• Base Expense Ratio (BER) introduced, excluding GST, stamp duty and Securities Transaction Tax.
Benefit: Investors can clearly see what the fund manager is actually charging.
• Additional 5 basis points exit load on early redemption removed.
Benefit: Investors can exit funds without extra penalty.
• Brokerage capped at 6 basis points (cash market) and 2 basis points (derivatives).
Benefit: Traders and investors cannot be overcharged by brokers.
• Research cost included within brokerage; no separate research charge allowed.
Benefit: Investors do not pay twice for brokerage and research.
