New Delhi, Oct. 30 -- The Securities and Exchange Board of India (SEBI) has proposed removing the additional 5 basis points (bps) expense allowance earlier granted to asset management companies (AMCs). The regulator has, however, proposed a 5 bps increase in the first two Total Expense Ratio (TER) slabs to partly balance the impact on AMC operations. The proposals form part of SEBI's latest consultation paper, which invites public comments until November 17, 2025, as per Centrum's Capital Markets report.

The additional 5 bps cushion was initially introduced after SEBI directed that exit load proceeds be credited back to mutual fund schemes. Now, by eliminating this leeway, SEBI seeks to rationalise expenses further and enhance disclosure...