SEBI Moves to Slash Mutual Fund Fees, Aims to Cut Investor Costs and Increase Transparency

Market regulator Securities and Exchange Board of India (SEBI) has unveiled a comprehensive consultation paper proposing significant reductions in mutual fund expense ratios—marking the first major overhaul of mutual fund (MF) regulations in nearly three decades. The proposals aim to make investing more cost-effective for retail investors while enhancing transparency across the industry. The proposals have sent shockwaves through the industry, with shares of major asset management companies (AMCs), including HDFC AMC, Nippon India AMC and Motilal Oswal AMC, declining over 2% following the announcement. Analysts at Jefferies estimate the changes could reduce profit before tax for AMCs by 30%-33% by 2027, while Morgan Stanley projects a 10%-23% impact on profits if cost cuts apply full