SEBI Circular/ Update on Mutual Funds (Sept 2025 – Nov 2025)
1. Mutual Funds Regulations and Review
SEBI (Mutual Funds) (Second Amendment) Regulations, 2025: These regulations were published in November 2025. While the specific details need to be checked from the full text, this indicates an active effort to update the regulatory framework.
Consultation on Comprehensive Review: A Consultation Paper on the Comprehensive Review of SEBI (Mutual Funds) Regulations, 1996 was released in October 2025. This suggests SEBI is planning a major overhaul of the existing rules.
2. Expense Ratio and Cost Structure
Review of Expense Ratio Cap: SEBI is reviewing whether the current cap on the Total Expense Ratio (TER) for mutual funds is too low.
- The regulator is considering feedback from the industry, which argues that a very low cap could hinder stock selection or distribution efforts.
- SEBI has stated that while it is open to review, transparency in costs remains non-negotiable.
3. Market Development and Investor Protection
Conflict of Interest/ Disclosure: A high-level committee proposed tightening conflict-of-interest and insider trading norms for top SEBI officials, which indirectly reinforces the regulator’s commitment to market integrity.
Unregulated Digital Gold Warning: SEBI issued a caution to investors against unregulated platforms offering digital gold products, stating that these are neither classified as securities nor regulated by the body. The regulator advised investors to opt for SEBI-regulated gold products like **Gold ETFs and Electronic Gold Receipts (EGRs) for greater protection.
