mumbai, Dec. 18 -- The capital markets regulator has slashed the brokerage fees that mutual funds can charge and approved new rules to simplify public-lisiting disclosures, among other measures, to protect retail investors and improve compliance. The Securities and Exchange Board of India (SEBI) cut brokerage costs that mutual funds can charge investors to 6 basis points (bps) from the current 12 bps in the cash market, according to the decisions announced after the regulator's board meeting on Wednesday. For the derivatives segment, brokerage limits have been reduced to 2 bps from the current 5 bps. The SEBI board also scrapped the additional 5 bps charged over the exit load or the fee levied when investors redeem their investments. The revised provisions are effective April 1, 2026. In October, the market regulator had recommended an overhaul of brokerage and transaction fees that investors pay over and above the total expense ratio (TER), to ensure that unitholders are not charged for the same service twice. SEBI had suggested cutting brokerage fee cap from 0.12% to 0.02% for cash-market trades and from 0.05% to 0.01% for derivatives transactions. The TER represents the annual expenses a mutual fund levies, covering fund management fees, administrative costs, brokerage and other operational charges. It is deducted from the fund's returns, directly affecting investors' earnings. Expense ratio limits, now called base expense ratios (BER), will exclude all statutory levies such as securities transaction tax (STT), commodities transaction tax (CTT), and goods and services tax (GST). TER will now be a sum of BER, brokerage, regulatory levies and statutory levies. "If you want to attract the people to your mutual fund, you can even offer lower than this. Our present proposal is a balanced version," said SEBI chair Tuhin Kanta Pandey. "It is not, I would say, as radical as it was proposed in the beginning," he said, adding that the focus is on transparency and making the charges more visible to the investor. The reduction in fee caps is expected to hit the margins of asset management companies, which may pass on the costs to distributors. "Smaller AMCs will not be happy as they will have to negotiate with the broker for block deals and research," said an AMC official on the condition of anonymity. Such AMCs are at a relative disadvantage due to the size of their AUM, he said. Exchanges first-line regulators for stockbrokers The stockbroker regulations, which have remained unchanged since 1992, have been organised into 11 chapters with some provisions being deleted and others being integrated as chapters to ease readability. Stock exchanges will now be the first-line regulators for stockbrokers. This means that stockbrokers will report non-compliance and furnish financial statements to exchanges....