The Securities and Exchange Board of India’s ( Sebi ) latest proposals to reduce fee structure by rationalisation of the total expense ratio (TER) and brokerage fees hit capital market stocks, including asset management companies, brokerages and mutual fund distributors badly on Wednesday. As many as 12 stocks fell over 5% intra-day.

“Overall, for an asset management company, the hit in the profits due to the changes proposed in TER may be to the tune of 4-6 bps,” said a CEO of a fund house.

Another worry is the proposal to sharply reduce brokerage costs – the cost that fund houses incur when they buy or sell securities. The market regulator has proposed to bring it down from the current high of 12 bps and 5 bps in cash and derivative market to 2 bps and 1 bps, respectively.

However,

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