Sebi sets lower single-issuer limits for mutual fund debt schemes

Credit-risk rating based limits introduced for all new schemes; existing schemes to be grandfathered


The decision is aimed to avoid inconsistency MF investments in debt instruments, the regulator has said.

Khushboo Tiwari Mumbai
The Securities and Exchange Board of India (Sebi) has introduced a credit-rating based single issuer limit for actively managed mutual fund schemes, potentially lowering the investment threshold in lower-rated papers.
Asset management companies (AMCs) have been directed not to invest more than 10 per cent of the scheme’s net asset value (NAV) in AAA-rated debt and money market securities from a single issuer. Schemes will have to limit their exposure at 8 per cent for AA-rated issuers while for instruments below A-rating, 6 per cent has been set as the threshold.

First Published: Nov 29 2022 | 9:23 PM IST

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