Shares of Motilal Oswal Financial Services Ltd. fell nearly 8% on Wednesday, October 29, following SEBI’s proposed changes to brokerage fee norms. The market regulator, in its draft regulations released Tuesday evening, suggested lowering the cap on brokerage commissions paid by mutual funds.
Under the proposal, brokerage fees on cash market trades would drop from 12 basis points to 2 basis points, while fees on derivatives transactions would be reduced from 5 basis points to 1 basis point.
Pratik Gupta of Kotak Institutional Equities told CNBC-TV18 that if implemented, the move could significantly affect small and mid-sized brokers, emphasizing that SEBI should allow market forces to operate freely. Ashish Somaiyaa of Whiteoak Capital AMC noted that the impact of reduced Total Expense Ratios remains to be seen, estimating an overall industry hit of 10–12 basis points.
Motilal Oswal’s shares were trading 7.5% lower at ₹1,009.2. Despite the decline, the stock remains up over 10% for the past month and is now positive on a year-to-date basis.