Ch.7 · Total Expense Ratio Limits · hard
What is the 'brokerage cap' for mutual fund portfolio transactions as per SEBI?
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EXPLANATION
SEBI has prescribed brokerage caps for mutual fund portfolio transactions: 0.12% for delivery-based equity transactions (physical settlement) and 0.05% for non-delivery/square-off transactions. These caps prevent AMCs from routing excessive brokerage to favored brokers (potentially associates). All brokerage paid must be disclosed in the scheme's annual report.
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