HDFC AMC, Nippon Life India AMC: AMC stocks rally up to 7% after SEBI tweaks several regulations; key things to know

The SEBI board decided to tweak the expense structures for the MF industry by introducing the concept of a base expense ratio (BER), which excludes statutory levies like security transaction tax (STT) and GST, which is a departure from the current system focused on total expense ratio (TER).

The concept of TER stays and shall be the sum of the BER, broking, regulatory levies and statutory levies, SEBI said.

SEBI Chairman Tuhin Kanta Pandey told reporters that the taxes and levies vary from time to time, and hence BER is a better way of looking at the expenses the industry charges.

The SEBI chief added that the regulator has settled to opt for a "balanced" set of rules rather than the "radical" proposals which had come out as part of the discussion paper earlier this week, which had led to investor unease on AMC stocks, and did not reply directly to a question on whether the new set of measures will hurt the profitability of companies or help the retail investors.

What is new for brokerage companies?

SEBI declared a rationalisation of brokerage limits, cutting the cap of 0.12% to 0.06%, and cut the same for derivative transactions from 0.05% to 0.02%.

This is positive for the companies, as the proposal in October was higher.

The brokerage charge was proposed to be revised from 12 bps to 2 bps for cash market transactions and 5 bps to 1 bps for derivative transactions to bring clarity and transparency.

Further, SEBI has also ended an additional 0.05 per cent exit load measure first introduced in 2018. Pandey said the new rules will be applicable from April 1 next year.

The SEBI board also overhauled over three-decade-old regulations concerning the stockbroking industry to make them more concise and transparent, Pandey said.

The markets regulator Sebi board on Wednesday also approved a series of measures aimed at improving investor convenience, easing compliance norms, and deepening participation in the capital and debt markets.

How AMC stocks are performing

At the time of writing this article, HDFC Asset Management Company, or HDFC AMC, shares were trading over 4% higher at ₹2,647.80 apiece on the NSE, while Nippon Life India Asset Management was trading nearly 7% higher at ₹923.95. UTI Asset Management Company was trading 2.4% higher at ₹1,140.00.

What CLSA said on the SEBI's move

CLSA noted that SEBI’s final Mutual Fund Regulation 2026 appears broadly neutral for AMC earnings. The new TER framework introduces a base expense ratio (BER), with statutory and regulatory levies now charged on actuals over and above the BER.

To offset this shift, BER limits were trimmed by about 10 basis points, while the additional 5 basis point allowance for schemes with exit loads was removed.

Brokerage caps were also rationalised, with the cash market brokerage reduced from 12 basis points (including levies) to 6 basis points (excluding levies), compared with an earlier effective cap of 8.59 basis points excluding levies.

Sensitivity analysis suggests a net TER impact of -2 to +3 basis points across AMCs, depending on commission payouts, leaving overall profitability largely unchanged.

How brokerage stocks are faring

Last seen, Angel One was trading nearly 1.5% higher at ₹2,540.90, while Nuvama Wealth Management was trading nearly 3% higher at ₹7,376. Motilal Oswal Financial Services was trading 2% higher at ₹849.70.