India’s capital markets regulator, the Securities and Exchange Board of India (Sebi), on Wednesday, 17 December 2025, decided to cut the charges of the expense ratios in mutual funds, revising its long-standing norms after companies urged the regulator to make the proposed cap on brokerage costs feasible for the asset management companies.
Mutual fund expense ratio limits, which are now known as Base Expense Ratio (BER), will exclude all the statutory levies like GST, Stamp Duty, SEBI fees, Exchange fees, among other charges, according to the official announcement.
The total expense ratio will not be the sum of the BER along with the brokerage, regulatory, and statutory levies, as per Sebi’s recent announcement.
Sebi has cut the expense ratios for Index Funds, Exchange Traded Funds (ETFs), Fund of Funds (FoF), Equity-oriented scheme funds (investing >65% of AUM), Other FoFs, Closed-ended schemes, and Other than equity-oriented schemes.
Change in Expense Ratio
1. Index funds Exchange Traded Funds (ETF)
Current (Including statutory levies) — 1.00%
Revised (excluding statutory levies) — 0.90%
2. Fund of Funds (FoFs)
Current (including statutory levies) — 1.00%
Revised (excluding statutory levies) — 0.90%
3. Investing ≥65% of AUM in equity-oriented schemes
Current (including statutory levies) — 2.25%
Revised (excluding statutory levies) — 2.10%
4. Other FoFs
Current (including statutory levies) — 2.00%
Revised (excluding statutory levies) — 1.85%
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