Mutual Fund Regulations 2026: Indian stock market regulator SEBI on Sunday put a complete stop to all the ongoing speculations and misleading reports regarding short selling. The institute has clarified that no changes have been made in the existing structure of short selling and the old system will remain in force.
Along with this, SEBI has issued ‘SEBI Regulation 2026’ to protect the interests of mutual fund investors. New guidelines have been issued under. The main objective of these reforms is to eliminate hidden costs in mutual funds and make the expense structure more transparent.
Refutation of rumors on short selling
SEBI, in an official statement, rejected media reports which claimed that the new rules for short selling will come into effect from December 22, 2025.
According to SEBI, such reports are completely false and investors need not be worried about any changes. The regulator has issued this clarification to maintain market purity so that no confusion is created among traders and investors.
New rules for mutual fund expenses
SEBI Board has replaced the old rules of 1996 with SEBI (Mutual Funds) Regulations, 2026. Has been given the green signal. The biggest impact of this change will be on the Total Expense Ratio (TER).
Now the fees charged to investors will be divided into three clear categories: base expense ratio, broker fees and statutory fees. This will make it easier for investors to understand how much of their money is going into fund management and how much is going into taxes or other charges.
Costs will reduce for investors
Under the new rules, SEBI has excluded some major charges like GST, stamp duty and STT from the base expense ratio. These charges can now be recovered only on the basis of actual expenditure.
Additionally, SEBI has reduced the maximum expense limit for index funds and ETFs from 1 per cent to 0.9 per cent. For closed-ended equity schemes, this limit has also been reduced from 1.25 percent to 1 percent, which will improve the returns in the hands of investors.
Also read: Year Ender 2025: That ‘Bahubali’ of IPO…who created a ruckus on Dalal Street, gave 125% return
Strictness on broker and distribution commission
SEBI has also amended the broker fee limits so that fund houses cannot charge money arbitrarily. Now a limit of 6 basis points has been fixed for equity cash market transactions and 2 basis points for derivatives.
Additionally, strict rules have also been imposed on distribution commission and performance-based expenses. SEBI believes that these steps will make the mutual fund industry more accountable and will strengthen the confidence of common investors in the market.
Comments are closed.