Indian AMC shares drop sharply amid SEBI’s major regulatory changes
Shares of asset management companies (AMCs) in India fell sharply by up to 9% in early trade on Wednesday after the Securities and Exchange Board of India (SEBI) proposed significant amendments to mutual fund regulations.
The proposed changes include an overhaul of the total expense ratio (TER) structure and revised limits on brokerage charges, News.Az reports, citing Mint.
Nuvama Wealth Management shares dropped as much as 8.91%, followed by Nippon Life India Asset Management, which fell 6.92%.
HDFC Asset Management Company shares declined 6.39%, while 360 ONE WAM stock fell 5.64%.
Other AMCs, including Aditya Birla Sun Life AMC, the recently listed Canara Robeco Asset Management Company, Anand Rathi Wealth, and UTI Asset Management Company, also saw declines of 3–4% each.
In a consultation paper issued on October 28, SEBI proposed eliminating the additional 5 basis points (bps) AMCs were previously allowed to charge across mutual fund schemes. To mitigate the impact, the first two slabs of the expense ratio for open-ended active schemes have been revised upward by 5 bps.
SEBI also revised brokerage charges from 12 bps to 2 bps for cash market transactions and from 5 bps to 1 bps for derivative transactions to enhance clarity and transparency. The regulator proposed excluding all statutory levies—STT, GST, CTT, and stamp duty—from expense ratio limits, along with permissible expenses for brokerage, exchange, and regulatory fees. A provision allowing AMCs to charge expense ratios based on scheme performance has been introduced on a voluntary basis.
Additionally, SEBI proposed simplifying eligibility norms for fund sponsors, digitizing investor communications such as annual reports, easing compliance by reducing the frequency of mandatory trustee meetings, replacing newspaper advertisements for scheme changes with online disclosures, and eliminating duplicative reporting requirements.
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