India, Dec. 18 -- SEBI has reduced the fee paid by domestic mutual funds to brokerages, while while also slashing the basic management charge in one of the most sweeping changes to its mutual fund regulations.

The payment to stock brokers on cash trades has been capped at 6 basis points, down from 8.59 basis points, according to a statement released after SEBI's board meeting on Wednesday. The stock market regulator had earlier proposed a fee of 2 basis points on the fee paid by asset managers.

One basis point is one-hundredth of a percentage point.

SEBI's new mutual fund regulations may incentivise a new generation of investors to move from traditional savings instruments into market-linked products. Only 10% of Indians had exposure t...