The Securities and Exchange Board of India (Sebi) has signalled a more flexible approach to mutual fund expense ratio limits. Sebi chief Tuhin Kanta Pandey said on Friday that the regulator is reviewing whether the current cap is too low, noting that there are “two points of view” on the issue.

Speaking at the CNBC-TV18 Global Leadership Summit 2025, Pandey said, “The cap is a cap — it’s a ceiling. We are discussing whether the ceiling is too low. Transparency in costs remains non-negotiable.”

Addressing feedback from market participants, Pandey added that the regulator is considering both sides of the argument. “There are two points of view — let’s see the cost structure, sell-side research, and if there’s a problem, we will take cognisance of the rationale to do that,” he stated.

He said that it is very important that the development of our mutual fund industry has happened through a well-regulated structure.