Mumbai, Dec 21 (NationPress) The Securities and Exchange Board of India (SEBI) confirmed on Sunday that there will be no modifications to the current framework governing short selling.

The market regulator emphasized that "a recent media report erroneously suggested modifications to the short selling framework taking effect from December 22, 2025."

On Wednesday, SEBI approved a thorough revision of mutual fund regulations aimed at enhancing cost transparency and alleviating the financial burden on investors.

The SEBI board ratified the changes, which will be rolled out through the new SEBI (Mutual Funds) Regulations, 2026, replacing the existing 1996 framework after an extensive review. Central to the reform is a reconfiguration of the Total Expense Ratio (TER) framework.

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

Under the updated structure, TER will consist of three elements: base expense ratio, brokerage fees, and statutory or regulatory charges. SEBI has also eliminated the additional 5 basis points (bps) expense allowance that was previously associated with exit loads.

The regulator has tightened regulations concerning brokerage while revising earlier proposals. For equity cash market transactions, mutual funds are permitted to pay brokerage up to 6 bps, an increase from the previously proposed 2 bps but significantly lower than the current cap of up to 12 bps. For derivative transactions executed by mutual funds, the brokerage limits have been adjusted to 2 bps, excluding regulatory charges.

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

Additionally, the board has ratified reductions in base expense ratio limits for various categories. The BER cap for index funds and exchange-traded funds (ETFs) has been decreased to 0.9 percent from 1.0 percent, with a similar reduction for liquid-scheme-based funds 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 revised regulations are intended to align mutual fund expenses more closely with actual costs while enhancing transparency and protecting investors across the industry.