Shares of asset management companies rallied sharply on Thursday morning, with Canara Robeco leading gains at 7.09 per cent, followed by HDFC AMC rising 4.69 per cent and Nippon Life AMC up 3.87 per cent, after market regulator SEBI approved new mutual fund regulations that proved more lenient than initially proposed.
The Securities and Exchange Board of India’s final guidelines for the SEBI (Mutual Funds) Regulations, 2026 introduced a Base Expense Ratio (BER) framework where statutory levies will be charged separately on actuals. Crucially, SEBI reduced the earlier proposed Total Expense Ratio (TER) cut from 15 basis points to just 10 basis points, providing relief to fund houses.
The regulator also removed the additional 5 basis point expense allowance linked to exit loads. However, analysts view this as largely priced in, with AMC stocks having already corrected 4-5 per cent after October’s discussion paper suggested harsher measures.
Brokerage caps were rationalized but remain higher than feared—cash market trades are now capped at 6 basis points excluding levies (versus the proposed 2 basis points), while derivative trades are capped at 2 basis points (versus the proposed 1 basis point).
Analysts from JM Financial, CLSA, and Prabhudas Lilladher termed the impact “neutral to marginally negative,” noting the changes protect the mutual fund ecosystem while improving transparency for investors. Prabhudas Lilladher estimates that assuming no pass-through of costs, core earnings for listed AMCs would be affected by 8-9 per cent, though partial cost transfers to investors are expected.
At 11:15 AM, UTI AMC gained 2.19 per cent while Aditya Birla Sun Life AMC rose 1.55 per cent. The new regulations, effective from April 1, 2026, replace the 1996 framework after a comprehensive review aimed at balancing investor protection with industry viability.