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Informist, Wednesday, Dec. 17, 2025

--SEBI OKs excluding all statutory levies from MF base expense ratio 

--SEBI cuts base expense ratio limit for index funds, ETFs to 0.9% from 1.0% 

--SEBI cuts base expense ratio for liquid-scheme based fund of funds to 0.9% 

--SEBI cuts base expense ratio for close-ended equity schemes to 1% vs 1.25% 

MUMBAI – The Securities and Exchange Board of India Wednesday revised the mutual funds' expense ratio limit framework, which has now been renamed as base expense ratio. The market regulator has approved excluding all statutory levies from the base expense ratio limit. Instead, levies such as securities transaction tax, goods and services tax, stamp duty, SEBI fees, and exchange fees incurred for execution of trades shall be charged on actuals, over and above the permissible brokerage limits.

Excluding statutory levies, the base expense ratio limit for index funds and exchange traded funds have been reduced to 0.9% from 1%. The same limit for fund of funds investing in liquid schemes, index funds, and ETFs have also been reduced to 0.9% from 1% earlier. For fund of funds investing more than 65% of assets under management in equity-oriented schemes, the limit has been reduced to 2.10% from 2.25% and for other fund of funds, it has been trimmed to 1.85% from 2% earlier. 

For open-ended equity schemes and others having assets under management slabs starting from INR 5 billion to more than INR 500 billion, the base expense ratio limit excluding statutory levies has been trimmed by 10-15 basis points. The base expense ratio limit for close-ended equity schemes has been reduced by 25 basis points from earlier to 1% and that for schemes other than equity-oriented schemes has been trimmed by 20 bps to 0.8%, the regulator said in a press release.  End

Reported by Anjana Therese Antony

Edited by Tanima Banerjee

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