AMFI Chairman Praises SEBI Mutual Fund Reforms: Positive for Investors & AMCs

The Association of Mutual Funds in India (AMFI) supports the recent SEBI reforms for mutual funds. They said that these reforms are balanced and will protect the interests of everyone involved, including everyday investors and asset management companies (AMCs).

Sundeep Sikka, Executive Director and CEO of Nippon India Mutual Fund and the newly elected AMFI Chairman, emphasized how these final rules bring much-needed certainty to the mutual fund industry. Sikka shared his thoughts with reporters by saying, "SEBI has rolled out a very balanced set of regulations after thorough consultations and it is a positive step for mutual fund investors as well as fund houses."

This support by AMFI has come right after SEBI's board meeting on December 17, 2025 (Wednesday), where they approved updated reforms for mutual funds and stock brokers. Their goal behind this changes was to simplify rules, lowering costs for investors and making compliance easier for intermediaries. It is one of the biggest regulatory reforms in years, paving the way for the new SEBI (Mutual Funds) Regulations, 2026.

The main highlight in the changes made is the renew of expense ratios. SEBI has renamed expense ratios as the Base Expense Ratios (BER) and made it clear that statutory charges like GST, stamp duty and transaction taxes will be charged separately on actuals, outside the BER.

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Meanwhile, they have adjusted BER limits across equity, debt, index funds, ETFs and fund-of-funds downward as assets under management (AUM) grow, but with some upward adjustments from initial proposals to avoid squeezing AMCs too hard. The net effect mostly mirrors the shift of levies out of the base ratio, rather than deep fee slashes.

Breaking down the cuts in the expense ratios for:

• Closed-ended equity schemes:BER drops to 1% from 1.25%.
• Closed-ended non-equity schemes:Down to 0.8% from 1%.
• Index funds and ETFs: Reduced to 0.90% from 1.00%.
• Fund-of-funds investing in liquid index ETFs:Capped at 0.90%.

Sikka said, "These new mutual fund rules from SEBI provide the clear guidance we need. This will help the industry grow and increase the use of mutual funds in India". Shares of many mutual fund companies climbed in early Thursday trading, driven by broad-based buying interest across the counters.

Another key change is the rationalisation of brokerage limits. In cash market transactions, the earlier brokerage cap of 12 basis points included statutory charges. Once the levies were stripped out, the practical brokerage component was about 8.59 basis points. SEBI has now reduced this further to 6 basis points, excluding levies. For derivatives, the effective brokerage cap has been cut to 2 basis points from about 3.89 basis points earlier. This is expected to reduce trading costs over time, especially in actively managed funds.

SEBI has also removed an additional 5 basis points expense allowance that was earlier permitted for schemes charging exit loads. This allowance was meant to be temporary and has now been withdrawn, closing a route through which schemes could charge higher expenses.

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