SEBI’s big market reset: Mutual fund costs cut, IPO rules eased: What changes for investors and companies

SEBI Unveils Major Regulatory Shake-up for Investors and Companies

SEBI has announced a significant overhaul of regulations covering mutual funds, IPOs, stock broking, corporate bonds, and governance. The changes aim to reduce costs for investors and companies while simplifying rules to boost participation and enhance compliance.

Main Highlights of the Regulatory Changes:

• Simplified Mutual Fund Expense Ratios: Mutual fund expense ratios are now divided into Base Expense Ratio (BER) and separate statutory charges. GST, STT, and stamp duty will be shown and charged independently, making total costs clearer for investors.
• Lower Brokerage Fee Caps: SEBI has slashed brokerage fee caps to just 6 basis points for cash equity trades and 2 basis points for derivatives, directly lowering trading costs for all investors.
• Easier IPO Access: Retail investors will now receive a short, easy-to-read abridged prospectus right at the DRHP stage, allowing them to check out IPO details earlier without wading through thick documents.
• Streamlined Demat Account Transfers: Transfers to demat accounts will now take just 30 days, down from 150, cutting out endless paperwork and long waits.
• Special Perks for Retail Investors and Others: Retail investors, senior citizens, women, and defence personnel will now get special perks in public debt issues, including extra interest rates or attractive discounts on investments.
• Simplified Compliance for Companies: If non-promoter shares are pledged before an IPO, depositories will now mark them as “non-transferable,” avoiding blocking the entire company listing process.
• Overhauled Mutual Fund Rules and Tightened Brokerage Limits: SEBI has overhauled decades-old mutual fund rules and tightened brokerage limits for clarity, making compliance simpler and more predictable for banks, brokers, and advisors.
• Raised Threshold for High-Value Debt Listed Entities: SEBI has raised the threshold for High-Value Debt Listed Entities to Rs.5,000 crore from earlier levels, helping NBFCs, housing finance companies, REITs, and insurers raise funds more easily.

These regulatory changes aim to make compliance easier, reduce costs for investors and companies, and protect everyday investors while promoting greater participation in the market.