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SEBI Mutual Fund Overhaul: Lower Brokerage, Clearer TER

30 October 20251 min read
BANKING & FINANCESEBI Mutual FundOverhaul: LowerBrokerage, ClearerTER30 October 2025safalsetu.com

Why in the news

SEBI wants simpler, clearer MF regulations that trim investor costs.

Key facts

  • Statutory charges, brokerage and fees to be shown separately; optional performance-linked TER.
  • Extra 0.05% over exit load removed; first two TER slabs of open-ended active schemes up 5 bps.
  • Launch costs fall on AMCs or trustees; emails, SMS and websites replace newspaper notices.
  • Regulation 24(b): AMCs may advise non-pooled funds using Chinese walls.
  • Scrapped: Capital Protection Oriented Schemes, Real Estate Mutual Funds, Infrastructure Debt Funds.

Terms

  • TER: yearly costs as a share of assets.
  • Exit load: fee for early redemption.
  • bps: 0.01%.

Exam angle

  • Know TER, exit load, Chinese wall.

Test yourself

1. What brokerage rate for the cash market did SEBI propose for mutual funds, down from 0.12%?

Cash market brokerage would fall from 0.12% to 0.02%.

2. Which charges would SEBI's proposal exclude from the Total Expense Ratio calculation for mutual funds?

Statutory levies like GST, STT, CTT and stamp duty would be excluded from TER.

3. In the SEBI mutual fund overhaul, what does one basis point equal?

One basis point is one-hundredth of a percentage point, i.e. 0.01%.

This topic is part of Daily Current Affairs 30 October 2025 (13 topics).

All topics of the dayDay quizOctober 2025

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