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SEBI has also recalibrated brokerage caps. For cash market transactions, the existing brokerage cap of 12 bps, which included statutory levies and translated to 8.59 bps net of levies, has now been reduced to 6 bps, exclusive of levies ( the consultation paper suggested 2 bps). For derivative transactions, the earlier cap of 5 bps, inclusive of statutory levies and amounting to 3.89 bps net of levies, has been reduced to 2 bps (the consultation paper suggested 1 bps), exclusive of levies.
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Moneycontrol•18-12-2025, 14:03

SEBI Resets MF Expense Ratios, Brokerage Caps: Relief for Fund Houses

  • •SEBI reduced mutual fund expense ratios by up to 15 bps, with an effective 10 bps cut for most AUM categories.
  • •The regulator replaced TER with Base Expense Ratio (BER), excluding external levies for greater transparency.
  • •Brokerage caps for cash market transactions lowered to 6 bps and derivative transactions to 2 bps, post-consultation.
  • •Caps for passive products, close-ended funds, and Funds of Funds (FoFs) were also revised downwards.
  • •Industry leaders like DP Singh (SBI MF) and Neil Parag Parikh (PPFAS MF) welcomed the moderated changes and increased transparency.

Why It Matters: SEBI's revised expense ratios and brokerage caps offer relief and transparency to the mutual fund industry.

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