The Securities and Exchange Board of India (Sebi) is working on a plan to streamline brokerage limits with the goal of making investing more cost-effective and transparent. This initiative aims to ensure that investors only pay for the value they receive, avoiding duplicate charges for the same services, according to industry specialists. This announcement followed Sebi’s release of a consultation paper that seeks to lower brokerage costs, enhance fee transparency, and clarify how investors are billed. Under the proposed changes, the total expense ratio (TER) would exclude all expenses, including brokerage and taxes, with a requirement for detailed disclosure of these costs to investors.
Feroze Azeez, Joint CEO of Anand Rathi Wealth, emphasized that rationalizing brokerage limits would prevent investors from paying multiple times for research and advisory services, aligning costs more closely with the actual value provided. He added that excluding statutory levies such as GST, STT, and stamp duty from the TER enhances clarity and facilitates easier comparisons of investment costs across various schemes. Trivesh D, Chief Operating Officer at Tradejini, also supported this view, stating that omitting statutory charges from the TER helps shield fund houses from the impacts of tax changes, thereby fostering greater transparency in cost disclosures.