HDFC AMC, Nuvama, Motilal Oswal Drag Capital Market Stocks Lower as SEBI Proposes Fee Structure Changes

Market Performance

The capital market space saw sharp selling pressure as stocks across the segment slipped on October 29. Shares of major market players fell in the range of 3% to 7%, pulling the broader capital market index lower.

Stocks tied to asset management, broking, and wealth management came under pressure soon after SEBI released its proposal to restructure mutual fund fee and cost frameworks. The Nifty Capital Markets index traded 2.3% lower at 4,533.85, reflecting the broad weakness across the pack.

Main News: SEBI’s Proposal Sparks Sell-Off

The decline was triggered by SEBI’s consultation paper outlining changes to mutual fund fee structures, expense ratios, and brokerage caps. The proposed framework aims to simplify costs charged to investors and bring more transparency to the way fund-related expenses are broken down.

Under the proposal, statutory charges such as Securities Transaction Tax (STT), GST, and stamp duty would continue to remain outside the expense cap. The focus shifts to reducing and reorganizing expenses within the total cost structure to streamline what investors pay.

Wealth management stocks also felt the impact, with several names in the segment slipping up to 4% as the proposed guidelines extend into broader mutual fund processes and fee systems.

Company Details

The sell-off was most visible in asset management companies and financial services firms with direct exposure to mutual fund-related fees.

The day’s movement saw sharper declines in stocks with larger dependence on mutual fund fee structures and brokerage income.

Among the broader financial landscape, the fee structure proposal has raised concerns around how the revised cost caps could affect expense-linked revenue streams. Firms operating across asset management, broking, and wealth platforms saw volatility through the day.

SEBI’s Key Proposals in Focus

To simplify the cost framework and add transparency across mutual fund operations, SEBI proposed several structural changes:

• Reduction in brokerage caps
  • Cash Market: from 12 bps to 2 bps
  • Derivatives: from 5 bps to 1 bps
• Revised clarity on expenses
  Costs should be clearly broken down and charged only once to the investor.
• Removal of certain charges
  The proposal includes discontinuing the 5 bps charge previously levied on equity funds where exit load applies.

These changes are aimed at ensuring that investors pay fair and transparent fees across all mutual fund categories.

Impact on the Capital Markets Index

With the proposal coming into focus, the Nifty Capital Markets index dipped sharply. Selling pressure intensified as stocks sensitive to brokerage caps and fund-related charges reacted to the potential restructuring.

The broader weakness was visible across the segment, with several stocks recording intraday declines between 3% and 7%. Wealth management stocks also dropped up to 4%, adding to the overall pressure on the index.

Summary

The capital market segment witnessed a notable decline after SEBI proposed a fresh overhaul of the mutual fund fee and cost structure. The proposed measures — including lower brokerage caps and changes in expense ratio components — triggered a wave of selling in stocks directly linked to fee-driven revenue.

While the Nifty Capital Markets index slipped 2.3%, stocks across asset management, broking, and wealth management saw broad-based pressure. The session reflected how sensitive the segment remains to regulatory shifts, especially when tied to cost and compliance frameworks.