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Shares of many Asset Management Companies (AMCs), including HDFC AMC, Canara Robeco and others, have jumped up to 8.5% on December 18, 2025, just a day after SEBI’s board approved major changes to fees included in mutual funds. The goal is to push for clear cost breakdowns that keep investors informed. The Nifty Capital Markets index is up 2%, showing that the market is responding positively to these updates on mutual fund fees from SEBI.
Brokerage Limits
SEBI reduced the limits on brokerage fees that Asset Management Companies (AMCs) pay to brokers and distributors. Now, these fees can exclude mandatory charges to prevent paying for research costs twice. Cash market transactions drop to 6 basis points (bps) from 12 bps (charges included), while derivatives fall to 2 bps from 5 bps. This was discussed at the December 17, 2025, board meeting.
Fund managers' average transaction costs could dip 10-15 bps from today's 12 bps levels. The new rules are easier than SEBI's October consultation paper, which suggested a 2 basis points fee for cash and 1 basis point for derivatives. Also, the extra 5-basis point allowance for schemes with exit loads is no longer available since exit loads will now go back into the schemes.
By 9:35 am, Nippon Life AMC soared 6%, HDFC AMC 4.5%, UTI AMC 4%, ABSL AMC 1.7%. Freshly listed Canara Robeco AMC hit 8.5% at Rs 312.
Must Read: Top 10 AMC in India 2026: Listed by AUM
TER Updates
SEBI's final call on Total Expense Ratio (TER) brings relief to fund houses and brokerages. They swapped TER for Base Expense Ratio (BER), shifting external levies such as GST, stamp duty, Securities Transaction Tax (STT), Commodity Transaction Tax (CTT) and others outside the cap. BER now sticks to core costs like management fees, distribution brokerage and RTA charges, with taxes shown separately.
For open-ended schemes in equity mutual funds with assets under management (AUM) below Rs 500 crore, the maximum total expense ratio (TER) has decreased from 2.25% to 2.10% for equity and from 2% to 1.85% for debt. Active equity funds now range from 0.95% to 2.1%, while fixed income funds range from 0.7% to 1.85%, depending on their AUM. For large schemes with over Rs 50,000 crore, the TER is 0.95% for equity and 0.7% for debt.
Broker Opinions
Global brokerage Citi calls it "almost neutral" for big AMCs, slightly positive for mid-sized ones with heavy distributor payouts. Wealth managers like Nuvama and 360 One are under 1% revenue hit, with shares up 4% and 1%, respectively.
PL Capital reports that most listed AMCs are expected to see a drop in core earnings of 8-9%, except for CRAMC. This decrease has already been reflected in the markets after the October paper, leading to a 4-5% correction. The smaller AMCs will benefit from the milder 10 bps GST cut, while the top six AMCs will remain unaffected by the change from a 15 bps to a 10 bps cut.
This news about the SEBI TER cut offers some relief as we head into the equity boom of 2026. If you are looking to invest in AMC stocks or mutual funds, these changes will help lower costs without harming profits.
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