MFs seek a middle ground with Sebi on broker fee cap

Mutual funds have urged the Securities and Exchange Board of India (Sebi) to make the proposed cap on brokerage costs feasible for asset management firms, according to three people familiar with the matter.

- Apoorva Ajith & Srushti Vaidya

“Mutual funds told Sebi that a reduction from 12 basis points (bps) to 2 bps is too sharp and that they should make it more practical and meet us halfway. They seemed open and receptive to our suggestions,” said an executive from an asset management company (AMC).

The chief executive officers of AMCs met the market regulator on Monday for an hour-long meeting to discuss the proposed caps on brokerage fees of mutual funds. Last month, Sebi proposed a sweeping overhaul of mutual fund regulations, which created widespread concern in the industry regarding margins and top-line.

An emailed query to Sebi didn't elicit any response.