SEBI removes transaction fee levy for MF distributors

Securities and Exchange Board of India (SEBI) has done away with transaction charges for mutual fund distributors, according to a circular released on August 8, 2025.

According to the master circular on mutual funds in June 2024, Asset Management Companies (AMCs) were allowed to pay transaction fee for subscriptions worth more than ₹10,000 to the mutual fund distributors. 

SEBI in its old circular had said AMCs could pay ₹100 as transaction charge for subscriptions of more than Rs. 10,000 . This would be deducted from the subscription amount and only the balance shall be invested. For new investors, this was ₹150 to incentivise distributors to bring in new investors. This rule now stands cancelled, SEBI said in its latest circular adding that the decision was taken after public consultation. This however applies only to regular schemes and not to direct schemes.