SEBI's Expense Ratio Tweak: Limited Impact on MF Profits, Says SBI MF's DP Singh

• SEBI's recent changes to mutual fund expense rules are less damaging than initially feared, with limited impact on fund house profitability.
• The regulator cut the base expense ratio by 10 basis points, not the proposed 15, easing industry concerns and providing clarity.
• DP Singh of SBI MF states that rising market volumes and Assets Under Management (AUM) will largely offset the impact of removing the 5 basis points linked to exit loads.
• Amisha Vora of PL Capital notes potential pressure on institutional broking earnings due to the 6 basis point cap on brokerage fees, though uniform payment could contain damage.
• SEBI's broader goal is transparency and unit holder protection, with growing capital markets expected to support the industry despite adjustments.

Why It Matters: SEBI's expense ratio changes will have a manageable impact on mutual fund profits, ensuring transparency.