SEBI shifts custodian fee from annual to monthly cycle starting Oct 2026
The new regime replaces the ₹10,00,000 annual fee (or 0.0005% of AUC) with a monthly fee of ₹85,000 (or 0.0000416% of AUC), effective October 1, 2026.
What changed
- SEBI amended the Custodian Regulations to replace annual fee with monthly fee.
- Monthly fee: ₹85,000 or 0.0000416% of AUC, whichever higher, payable within 15 days of month end.
- Existing custodians must pay pro-rata annual fee for the transition period before Oct 1, 2026.
The read
SEBI is trading a lump-sum annual charge for a lighter, recurring one. The old regime demanded ₹10,00,000 or 0.0005% of assets under custody annually. The new one asks for ₹85,000 or 0.0000416% each month — a near-exact split of the annual equivalent. The shift is more about cash flow than total cost. For custodians, the operational burden moves from one annual payment to twelve monthly ones, each due within 15 days of month-end. New registrants get a proportionate rate for the first month. Existing ones must settle a pro-rata annual fee for the period up to October 1, 2026, with the monthly regime taking over after that. Any advance payment already made will be adjusted. The change is procedural, not penal; it modernises the fee cycle without altering the base. Custodians should update their compliance systems to avoid a lapse.
Primary source: official circular (PDF)