Home / Business and Economy / AMFI Challenges SEBI's Proposed Mutual Fund Fee Cuts as 'Too Steep'
AMFI Challenges SEBI's Proposed Mutual Fund Fee Cuts as 'Too Steep'
17 Nov
Summary
- SEBI proposes TER cap of 2.1% for funds under ₹500 crore, falling to 0.9% for funds over ₹50,000 crore
- AMFI believes the 1.2% gap is "too steep" and could disadvantage larger funds
- AMFI likely to argue for higher brokerage and gradual TER reductions
As of November 17th, 2025, the Securities and Exchange Board of India (SEBI) has proposed a significant overhaul of the mutual fund expense structure, including lower base Total Expense Ratio (TER) slabs for open-ended schemes. However, the Association of Mutual Funds in India (AMFI) is now preparing to submit its response, suggesting that the proposed cuts could disrupt fund launches and the mutual fund distribution ecosystem.
According to sources, SEBI's proposal to cap TERs at 2.1% for schemes with assets under management (AUM) up to ₹500 crore, while reducing it to just 0.9% for schemes with AUM exceeding ₹50,000 crore, is considered "too steep" by AMFI. The industry body believes this 1.2% gap could disadvantage larger mutual funds if approved.
AMFI is likely to argue that TER regulations should only apply from an AUM size of ₹2,000 crore, rather than the proposed ₹500 crore. The association also believes the proposed gradation of TERs, decreasing with fund size, should be more gradual at present. Additionally, AMFI is expected to seek higher brokerage paid by mutual funds compared to the 2 basis points currently proposed by SEBI.
