SEBI Revamps Mutual Fund Expense Structure

Big update for every investor and mutual fund distributor in India. SEBI is planning

a major revamp in how mutual fund expenses are charged. Right now, fund houses charge

a Total Expense Ratio that’s the cost investors pay every year. But SEBI says it’s

time to simplify and make it more transparent. Here’s what’s changing. Expense ratios may

be cut by up to 15 basis points meaning investors could soon pay less in annual charges.

Brokerage and transaction costs will be shown separately, instead of being hidden inside the

total expense. The brokerage cap is being reduced from 12 basis points to just 2 basis

points for cash market trades, and from 5 basis points to 1 basis point in derivatives.