SEBI board meet today: Asset disclosure, mutual fund charges on agenda

This would be the fourth board meeting chaired by Sebi chief Tuhin Kanta Pandey who assumed office on March 1.

The Securities and Exchange Board of India (Sebi) board is set to consider a report by a high-level panel that has recommended mandatory public disclosure of assets by senior officials to prevent conflicts of interest, officials said. The board will also review proposals to overhaul norms governing mutual funds and stock brokers.

This will be the fourth board meeting chaired by Sebi Chairperson Tuhin Kanta Pandey, who assumed office on March 1.

During the meeting, the market regulator will discuss the panel’s report submitted to Pandey on November 10, which calls for sweeping reforms aimed at improving transparency and fostering a “zero-tolerance” culture to address conflicts of interest among top Sebi officials. The panel has suggested several measures, including the creation of a secure and anonymous whistleblower mechanism to report conflicts of interest, a ban on accepting expensive gifts, a two-year cooling-off period for post-retirement assignments, and the establishment of a Chief Ethics and Compliance Officer (CECO) post.

Other key items on the agenda include proposals to relax KYC norms for non-resident Indians (NRIs) and the introduction of a closing-auction session in the markets, officials added.

On mutual fund regulations, Sebi has already floated consultation papers proposing a comprehensive overhaul of existing rules. In October, the regulator suggested a clearer definition of the Total Expense Ratio (TER) and revised limits on brokerage charges, with the objective of enhancing transparency, rationalising disclosures, reducing redundancies, and easing compliance.

As part of the proposed framework, Sebi plans to withdraw the additional 5 basis points (bps) that asset management companies (AMCs) are currently allowed to charge across mutual fund schemes. This extra expense was originally introduced to offset the impact of crediting exit loads back to schemes. It was first set at 20 bps in 2012 and later reduced to 5 bps in 2018, and was intended to be transitory in nature.

The regulator has also proposed excluding statutory levies such as Securities Transaction Tax (STT), Goods and Services Tax (GST), Commodity Transaction Tax (CTT), and stamp duty from TER limits, along with permissible expenses related to brokerage, exchange, and regulatory fees. Currently, GST on management fees is permitted over and above the TER cap, while other statutory charges are included within the limit.

In addition, the Sebi board will deliberate on revising the Stock Broker Regulations framed in 1992. As part of this review, the regulator has proposed introducing a formal definition of “algorithmic trading” to streamline compliance, noting that the existing framework lacks clarity in this area. Officials said the review is aimed at modernising regulations that are over three decades old.