SEBI Finalizes MF Overhaul: Brokerage, TER Caps Reduced After Consultations

• SEBI chairman Tuhin Kanta Pandey stated the mutual fund overhaul decision is a "balanced version" after extensive consultations, not as radical as initially proposed.
• Brokerage limits reduced: Cash market cap cut from 12 bps to 6 bps; derivatives from 5 bps to 2 bps, both exclusive of statutory levies.
• Expense ratios (BER) lowered for equity-oriented and non-equity schemes across AUM slabs, with statutory levies now excluded from BER calculation.
• Index funds, ETFs, and Fund of Funds also see reduced expense caps, aiming to benefit investors.
• The additional 5 bps expense allowance for schemes charging exit loads has been removed.

Why It Matters: SEBI moderates MF regulation changes, reducing brokerage and expense ratios for investor benefit.