Nuvama, HDFC AMC Share Price Falls As SEBI Proposes New Mutual Fund Regulations

New Delhi, October 29: The share prices of major Asset Management Companies (AMCs) such as Nuvama and HDFC AMC are falling today, on October 29. As of 12:45 PM, Nuvama Wealth Management share price is down by 2.17%, or 161.50 points, and is trading at ₹7,281. On the other hand, HDFC AMC share price is down by 4.46%, or 252 points, and is trading at ₹5,394.50. Furthermore, the Nifty Capital Markets Index is also trading lower by 2.11%, or 98.05 points at 4,545.05.

Key Trigger: Proposal By SEBI For New Mutual Fund Regulations

The negative sentiments in the capital market and AMC stocks comes after a new proposal to change regulations related to mutual funds in India. SEBI has proposed the removal of the additional 5 basis points (bps) that mutual fund houses were allowed to charge across their mutual fund schemes. It has proposed a new 5 bps upward revision in the first two slabs of the expense ratio as a replacement.

Furthermore, SEBI has proposed to reduce brokerage limits from 12 bps to 2 bps for cash market transactions, and from 5 bps to 1 bps for derivatives. Lastly, it has been proposed that levies such as STT, GST, CTT, and stamp duty be excluded from TER limits.

How the New Regulations Will Affect the Investors?

SEBI has introduced the new regulations to make investing in mutual funds cheaper for investors from the current costs. It will do so by removing the extra 5 basis points from expense ratios. Additionally, investing may get cheaper due to the exclusion of statutory levies. However, the stocks of AMCs are trading lower as the new regulations will hurt the earnings of brokers and distributors if their commissions are reduced.

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