SEBI Cuts Mutual Fund Fees; AMC Stocks Rally in Early Trade

Market Performance

The stock market today opened with visible action in asset management company (AMC) stocks after a key regulatory move. A day after SEBI cuts mutual fund fees, shares of leading AMCs moved higher in early trade, standing out in an otherwise mixed market.

In Thursday’s opening session:

• HDFC AMC share price jumped over 4.5%
• ABSL AMC shares gained around 2.5%
• Canara Robeco AMC's share price surged more than 6%

The rally reflected a quick market response to changes announced by the capital markets regulator late Wednesday.

Main News: SEBI Cuts Mutual Fund Fees

On Wednesday, December 17, 2025, the Securities and Exchange Board of India (SEBI) approved a revision in mutual fund expense norms. The decision focused on reducing the cost burden on investors and improving transparency across schemes.

Under the revised framework:

• Mutual fund expense ratio limits are now termed Base Expense Ratio (BER)
• Statutory levies such as GST, stamp duty, SEBI fees, exchange fees, and other charges will be excluded from BER
• The total expense ratio will no longer be calculated by adding statutory levies to the base expense ratio

This marks a shift from long-standing norms that bundled multiple costs into the expense ratio charged to investors.

Impact on AMC Stocks

The announcement triggered immediate buying interest in AMC stocks across the board. Market participants appeared to factor in the structural clarity brought by the revised expense framework.

With expense ratios being clearly separated from statutory costs, fund structures are expected to reflect charges more transparently. This clarity played a role in boosting sentiment around AMC stocks in early trade.

The reaction was clearly visible in:

• HDFC AMC share price
• ABSL AMC share
• Canara Robeco share price

All three recorded strong opening gains following the regulatory update.

Revised Mutual Fund Expense Ratio Structure

SEBI also outlined revised expense limits across various categories of mutual fund schemes. These changes apply after excluding statutory levies.

Index Funds and ETFs

• Earlier limit: 1.00%
• Revised limit: 0.90%

Fund of Funds (FoFs)

• Investing in liquid schemes/index funds/ETFs
  • Earlier: 1.00%
  • Revised: 0.90%
• Investing ≥ 65% of AUM in equity-oriented schemes
  • Earlier: 2.25%
  • Revised: 2.10%
• Other FoFs
  • Earlier: 2.00%
  • Revised: 1.85%

Open-ended Schemes

• AUM up to ₹500 crore (Equity-oriented)
  • Earlier: 2.25%
  • Revised: 2.10%
• AUM up to ₹500 crore (Other than equity-oriented)
  • Earlier: 2.00%
  • Revised: 1.85%

These revisions apply uniformly across scheme categories, reinforcing SEBI’s intent to standardise cost structures.

Broader Market Context

The move comes at a time when SEBI has been focusing on increasing retail participation and strengthening compliance standards across the mutual fund industry. By redefining how expenses are calculated and disclosed, the regulator aims to simplify cost visibility for investors.

In stock market news today, this regulatory clarity became a key trigger for AMC stocks, even as broader indices remained cautious.

Summary

AMC stocks such as HDFC AMC, ABSL AMC, and Canara Robeco AMC gained sharply after SEBI cut mutual fund fees by revising expense ratio norms. The introduction of the Base Expense Ratio, excluding statutory levies, marked a structural change in how mutual fund costs are calculated.

The announcement drove early buying interest in AMC shares, making them one of the most active pockets in the Indian stock market during the session.