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ETMarkets.com The Securities and Exchange Board of India’s (SEBI) proposed revamp of mutual fund fee rules is unlikely to significantly disrupt AMC-distributor relationships, but it could meaningfully reduce costs for investors, according to Akhil Chaturvedi, Executive Director and Chief Business Officer at Motilal Oswal Asset Management Company (AMC).Speaking to ET Now, Chaturvedi said that the proposed consultation paper on total expense ratios (TER) and brokerage limits would result in negligible changes in commission structures but would ultimately lead to better investor outcomes through lower operating costs.“The proposed 15 basis point reduction in base TERs, when adjusted for GST and other exclusions, should be revenue-neutral for both AMCs and distributors,” Chaturvedi explained. “The only difference could arise from the removal of the additional five basis points that was earlier charged in lieu of the exit load.”Negligible impact on AMCs, normalization possibleChaturvedi clarified that while the exit-load-linked five basis points may create a one-time normalization effect between asset managers and distributors, the overall business model will remain stable.“For regular operations, there’s no major impact or need for renegotiation. Both AMCs and distributors will continue to operate profitably under the new norms,” he added.Live EventsYou Might Also Like:Sebi's proposal to rationalise brokerage limits aims to cut costs, boost transparencyHe also noted that the industry has consistently adapted to regulatory reforms over the past decade while maintaining growth momentum.Lower brokerage, higher investor benefitThe SEBI consultation paper proposes a 10-basis-point reduction in brokerage on mutual fund trades, aiming to enhance transparency and pass cost savings to investors.Chaturvedi said that such measures are in line with the regulator’s intent to ensure that as the mutual fund industry scales up, investors share the benefits of efficiency gains.“Every time the industry achieves economies of scale, SEBI ensures those benefits flow to investors,” he noted. “Over the years, we’ve seen reforms in TERs, entry loads, and exit loads — all of which have improved investor value.”You Might Also Like:Sunil Subramaniam sees SEBI’s fee cut as long-term positive for mutual fundsReforms to continue as industry expandsIndia’s mutual fund industry has grown threefold from ₹25 lakh crore in 2018 to ₹75 lakh crore currently, and Chaturvedi believes structural reforms will continue as the sector scales further.“We’re still in a growth phase and could expand significantly over the next 5–15 years. Reforms like these ensure long-term sustainability and investor trust,” he said.He added that the latest brokerage reduction could enhance investor returns by marginally lowering fund expenses without impacting AMC profitability.Investor-centric regulation driving growthAccording to industry observers, SEBI’s ongoing focus on fee transparency and investor protection has played a crucial role in deepening mutual fund participation across retail and institutional investors.You Might Also Like:Sebi’s fee cut proposal sparks selloff in AMCs, brokerage stocks“The proposed reduction in trade costs is meaningful and aligns with SEBI’s vision of ensuring investors get maximum value for their money,” Chaturvedi emphasized.The final impact will depend on the regulator’s implementation framework once the consultation process concludes.Add as a Reliable and Trusted News Source Add Now! (You can now subscribe to our ETMarkets WhatsApp channel) Read More News onSebi mutual fund fee rulestotal expense ratiosmutual fund cost reductionlower brokerage mutual fundsinvestor protection mutual fundsinvestor benefits mutual fundsMotilal Oswal Asset Management CompanyAkhil Chaturvedibrokerage reduction SEBImutual fund industry growth (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price...moreless (You can now subscribe to our ETMarkets WhatsApp channel)Read More News onSebi mutual fund fee rulestotal expense ratiosmutual fund cost reductionlower brokerage mutual fundsinvestor protection mutual fundsinvestor benefits mutual fundsMotilal Oswal Asset Management CompanyAkhil Chaturvedibrokerage reduction SEBImutual fund industry growth(What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. 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