India’s mutual fund industry could face a moderate reduction in profitability if the Securities and Exchange Board of India (SEBI) implements its proposed changes to fund-cost regulations, according to a new analysis by Nomura. The regulator’s consultation paper, released earlier this week, sets out several reforms aimed at lowering investor costs, including the removal of the additional 5-basis-point levy on schemes that charge exit loads, a 15-bps reduction in total expense ratio caps across equity AUM slabs, and a steep cut in the brokerage-fee ceiling.

Nomura identifies the withdrawal of the 5bps levy as the most financially significant change for asset managers, and its estimates show the impact will vary across firms. For HDFC AMC, the largest equity manager, for example, the remova

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