The Securities and Exchange Board of India (SEBI) will meet on December 17 to discuss a set of investor-focused reforms that could reduce mutual fund costs, simplify IPO disclosures and tighten regulatory oversight.
The proposals are part of SEBI’s broader push to make investing more transparent, cost-efficient and aligned with long-term participation.
Rationalising mutual fund cost structures
One of the key agenda items is the optimisation of cost structures across asset management companies.
SEBI is considering reducing brokerage commissions paid by mutual funds on equity transactions. Currently, funds pay around 12 basis points (bps) for cash market trades and 5 bps for derivatives. These could be lowered substantially, with proposals reportedly examining levels as low as 2 bps for cash trades and 1 bps for derivatives.
Lower transaction costs at the fund level may eventually translate into higher net returns for investors.
The regulator is also evaluating further rationalisation of Total Expense Ratios (TER), particularly for large funds. In addition, SEBI is deliberating whether taxes such as GST and STT should be excluded from TER disclosures, allowing investors to clearly distinguish management fees from statutory levies.
Simpler IPO disclosures for investors
To improve accessibility of IPO information, SEBI is considering mandating a 15–20 page Offer Document Summary highlighting key business, risk and financial details.
This would replace the existing Abridged Prospectus, which often runs into hundreds of pages and is difficult for retail investors to analyse. The objective is to reduce information overload and improve decision-making quality.
SEBI is also expected to address operational challenges faced by depositories in tracking locked-in shares post listing.
Governance tightening and regulatory clarity
Alongside market reforms, SEBI is reviewing internal governance standards.
A high-level committee has recommended stricter conflict-of-interest norms for SEBI officials. Chairperson and board members may be classified as “insiders”, requiring enhanced asset disclosures and stricter post-tenure cooling-off restrictions.
Separately, algorithmic trading may be formally defined under SEBI regulations for the first time, enabling clearer supervision of high-frequency and automated trading strategies.
Why this matters for investors
If approved, these measures could have meaningful long-term implications:
- Lower mutual fund costs can improve compounding over extended investment horizons
- Simpler IPO documents may reduce uninformed subscriptions and improve risk assessment
- Clearer regulatory definitions strengthen market integrity and investor confidence
The December 17 meeting will be closely watched as it may signal SEBI’s next phase of investor-centric reforms aimed at lowering friction and improving transparency in India’s capital markets.