SEBI keeps short selling rules unchanged, updates mutual fund rules for lower costs and transparency.

SEBI confirmed on December 21, 2025, that short selling rules remain unchanged, dismissing reports of upcoming reforms. The regulator also approved major updates to mutual fund regulations, replacing the 1996 framework with the SEBI (Mutual Funds) Regulations, 2026. Key changes include a revised Total Expense Ratio that excludes statutory charges like STT, GST, and exchange fees, which will now be billed separately. Brokerage caps are set at 6 basis points for equity cash trades and 2 for derivatives. Base expense ratios have been lowered for index funds, ETFs, and close-ended equity schemes, while exit load-linked expense allowances and distribution commissions have been tightened. Performance-linked fees are permitted under strict conditions. The reforms aim to improve cost transparency and investor protection.