SEBI’s Mutual Fund Reforms: Unbundling Fees and Setting Stricter Caps

The Securities and Exchange Board of India (SEBI) has implemented significant reforms aimed at improving transparency in mutual fund fee structures. These changes unbundle the Total Expense Ratio (TER) into four components: Base Expense Ratio (BER), brokerage and transaction costs, regulatory levies, and statutory levies. With stricter caps on BER across various fund types, such as index funds and ETFs, investors will now see clearer breakdowns of costs.