India’s asset-managers tumble after regulator’s mutual fund fee revamp proposal

Shares of several Indian asset-management companies plunged up to 8% after the Securities and Exchange Board of India (SEBI) proposed sharp cuts in brokerage fee caps for cash and derivatives trades, signalling a major hit to profitability for AMCs and brokers. Institutional brokerage firms also face pressure as cash transaction fee caps fall from 12 bps to 2 bps and derivatives from 5 bps to 1 bp. Analysts warn that some firms could see profit-before-tax shrink by 30-33% by 2027 unless they restructure. The move benefits investors through lower costs but challenges the business models of many AMCs and market brokers.