HDFC AMC shares fall over 3% on profit booking post 7% rally after SEBI rule change
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The correction comes a day after the stock of HDFC AMC rallied 7% in intraday trade, as the Securities and Exchange Board of India (SEBI) introduced a sweeping overhaul of mutual fund expense regulations, including the introduction of the Base Expense Ratio (BER).
On Thursday, HDFC AMC shares had surged as markets initially cheered SEBI’s move to simplify cost disclosures and enhance transparency. However, Friday’s pullback suggests investors reassessed the implications of the changes, especially the tighter cost caps and reclassification of charges, which could potentially impact asset managers’ profitability in the long term.
SEBI’s new framework splits the total expense ratio into four components: the base expense ratio, brokerage, statutory levies, and regulatory levies. Notably, statutory and regulatory charges like GST, STT, and SEBI fees, previously bundled into the expense ratio, will now be disclosed separately, offering investors greater clarity on actual fund costs.
As per the revised framework, the total mutual fund expense ratio will now consist of four separate components: the base expense ratio, brokerage, statutory levies, and regulatory levies.
It has also scrapped the additional 5 basis points that fund houses are currently allowed to charge across schemes.
This structural change is designed to simplify expense disclosures and help investors better understand fund costs, even if it does not result in an immediate reduction in overall expenses.Also read: Ashish Kacholia-backed multibagger stock to turn ex-split on Dec 22; last day to qualify for eligibility. Do you own?
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