HDFC AMC, UTI AMC & More AMC Stocks in Focus as SEBI Proposes Lower MF Expense Ratio

The Securities and Exchange Board of India (SEBI) has introduced a new set of proposals aimed at making mutual fund operations more transparent and cost-effective for investors. Under the new plan, the cap on brokerage fees for cash market transactions would be lowered from 12 basis points to 2 basis points, while for derivatives, it would drop from 5 basis points to just 1 basis point.

Separate Business Units for Non-MF Activities

SEBI has also suggested that fund houses entering non-mutual fund management activities must operate through separate business units. This move aims to ensure clear segregation of responsibilities and financial accountability across business segments.

Statutory Levies and Expense Ratios

Statutory levies such as the Securities Transaction Tax (STT), Goods and Services Tax (GST), and stamp duty will remain outside the total expense limit. Additionally, SEBI plans to introduce performance-linked expense ratios, where a fund’s expenses could vary depending on its performance. This structure seeks to align the fund manager’s earnings with the returns delivered to investors.

Focus on Transparency and Investor Interests

These measures mark a shift from SEBI’s 2023 stance, which proposed including statutory charges within total expenses, a move that faced resistance from the mutual fund industry. SEBI has also proposed removing the additional expense of five basis points on the entire Assets Under Management (AUM).

Share Price Performance

On October 28, HDFC AMC shares gained 1.89%, while Nippon Life AMC fell 0.62%, UTI AMC declined 1.12%, and Aditya Birla Sun Life AMC slipped 1.34%.

Also Read: Best Nifty 50 Index Funds in India for Nov 2025!

Conclusion

The proposed changes reflect SEBI’s commitment to improving transparency and ensuring fairer costs for investors. By linking expenses to fund performance and streamlining fee structures, SEBI aims to create a more investor-centric mutual fund ecosystem under the evolving GST 2.0 framework.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully.