Amfi leads data drive as Sebi plans fee cap

The mutual fund industry is compiling an extensive dataset on portfolio churn and transaction costs to help the Securities and Exchange Board of India (Sebi) evaluate its proposal to sharply cap brokerage fees.

- Apoorva Ajith & Srushti Vaidya

According to three people aware of the matter, the Association of Mutual Funds in India (Amfi) asked fund houses to submit turnover data which will help assess the brokerage and transaction costs incurred while executing trades.

The consolidated information will be sent to Sebi, which wants to determine how significant brokerage expenses are for funds before finalising the proposed caps.

Sebi on 28 October proposed slashing brokerage paid by mutual funds from 12 basis points (bps) to 2 bps in the cash market, and from 5 bps to 1 bps for derivatives. The move is aimed at preventing investors from effectively paying twice for research—first through brokerages, and again through the asset management company’s own research.