The Securities and Exchange Board of India (SEBI) stated on Sunday that there will be no alterations to the current regulatory framework concerning short selling.

The market regulator emphasized that “a news article inaccurately reported potential changes in the short selling framework set to take effect from December 22, 2025.”

On Wednesday, SEBI approved a thorough reform of mutual fund regulations aimed at enhancing cost transparency and alleviating the expense load on investors.

This overhaul was approved by the SEBI board and will be enacted through the new SEBI (Mutual Funds) Regulations, 2026, which will replace the existing framework from 1996 following an extensive review. Central to this reform is a reorganization of the Total Expense Ratio (TER) framework.

SEBI has sanctioned the exclusion of statutory and regulatory charges—including securities and commodities transaction tax (STT/CTT), GST, stamp duty, SEBI fees, and exchange costs—from TER calculations. These charges will now be billed on an actual basis, in addition to the Base Expense Ratio (BER), providing investors with a clearer understanding of fund management expenses.

Under the newly structured system, the TER will consist of three parts: base expense ratio, brokerage costs, and statutory or regulatory charges.

Additionally, SEBI has eliminated the extra 5 basis points (bps) expense allowance that was previously associated with exit loads.

The regulator has tightened the norms related to brokerage while revising previous proposals. For equity cash market transactions, mutual funds will be allowed to pay brokerage of up to 6 bps, an increase from the previously suggested 2 bps but still significantly lower than the existing levels of up to 12 bps.

For derivative transactions conducted by mutual funds, the brokerage caps have been adjusted to 2 bps, excluding statutory costs.

SEBI has also approved stricter limits on distribution commissions and permitted performance-linked expense structures for specific mutual fund schemes, subject to regulatory guidelines.

Moreover, the board endorsed reductions in base expense ratio limits across various categories. The BER cap for index funds and exchange-traded funds (ETFs) has been reduced to 0.9 percent from 1.0 percent.

A similar decrease has been made for liquid-scheme-based fund of funds. For close-ended equity schemes, the base expense ratio limit has been lowered to 1 percent from 1.25 percent.

SEBI stated that the updated regulations are intended to better align mutual fund expenses with actual costs while enhancing transparency and investor protection throughout the industry.