New Delhi, Oct. 28 -- The stock market regulator on Tuesday proposed sweeping changes to how mutual funds charge investors, as well as easing business restrictions on them. In a consultation paper, the Securities and Exchange Board of India (Sebi) outlined overhauling the total expense ratio (TER) structure, and increasing transparency in charges levied on investors.

Sebi suggested capping brokerage and transaction costs charged to investors, currently allowed over and above the TER limit. TER is the cap on the annual costs that a mutual fund can charge its investors, covering management fees, administrative expenses, brokerage, and other charges related to running the fund. It is deducted from the fund's returns, which affects what cust...