Why India's markets regulator has revised mutual fund fees

New SEBI rules aim to cut costs, simplify fund disclosures and boost transparency

- BY NIVETHA DAYANAND

India's markets regulator has approved a sweeping overhaul of mutual fund regulations, rewriting a framework that has governed the industry for nearly three decades.

The changes, cleared by the Securities and Exchange Board of India (SEBI) at its December 17 meeting, aim to lower costs, improve transparency and simplify compliance without diluting investor protection.

For investors, this reshapes how fund expenses are calculated, disclosed and capped. Here are the key takeaways.

Mutual fund fees will be clearer and easier to track

SEBI has redefined the Total Expense Ratio by breaking it into clearer components, allowing investors to see exactly what they are paying for.

The Base Expense Ratio will now exclude statutory and regulatory levies such as GST, stamp duty, securities transaction tax, exchange fees and SEBI charges. These will instead be charged on actuals, over and above brokerage limits.

The Total Expense Ratio will now be the sum of the base expense ratio, brokerage costs and statutory levies.

Brokerage costs are capped more tightly