SEBI Chairman Tuhin Kanta Pandey addressed industry concerns over the proposed cap on brokerage fees for mutual funds, emphasizing that the regulator is in the midst of a genuine consultation process and that no final decision has yet been made.

Speaking at the CNBC-TV18 Global Leadership Summit 2025, Pandey stated that consultation papers are designed not just to inform but to encourage “sincere consultations” and gather input from a wide range of market stakeholders.

He noted, “Different participants come back to us with their views and rationale, and we look at them carefully. This is not a decision but food for thought for everyone to comment on. We don’t decide things sitting in our rooms — we put them out for wider public consultation to ensure broader buy-in and better decision-making.”

India’s mutual fund industry has tripled in size over the past five years, and SEBI aims to double the current base of 130 million investors within the next five years.

Market participants, however, have voiced worries that a sharp reduction in the brokerage cap could negatively impact sell-side research quality, as lower revenues might force a contraction in the analyst community.

Pandey declined to speculate on possible compromises, saying, “Let us not speculate. Let the things come out.” He added that SEBI would remain “a very good listener” and would consider all rationale presented during consultations.

Explaining the reasoning behind the proposal, Pandey said it is part of SEBI’s broader effort to enhance transparency for investors. The consultation paper also proposes clearer cost disclosures and separating taxes from expense ratios to improve clarity. He acknowledged that the brokerage fee cap has become a particular “pain point” drawing attention within the industry.