InvestorQ : What are the implications of the latest SEBI announcement pertaining to mutual funds?
manisha Kolvenkar made post

What are the implications of the latest SEBI announcement pertaining to mutual funds?

Answer
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Mahima Roy answered.
1 year ago


After some of the FMP defaults that happened in the last few months, the regulator has been worried about protecting the interests of the mutual fund investors in a more orderly way. In that regard, SEBI made some important announcements pertaining to regulating mutual funds more closely. Here is a gist.

· SEBI has asked all the mutual fund schemes to gradually shift their portfolios to only listed or to-be-listed equity and debt securities in a phased manner.

· Mutual funds (debt funds) will have to eventually reduce their share of unrated debt in the portfolio from the current 25% to the new level of 5%. This will ensure greater transparency in debt fund portfolios.

· The valuation of debt securities based on amortization will be dispensed and all debt and money market securities will have to be valued on mark to market (MTM) basis.

· Mutual funds will now be allowed to accept upfront fees subject to appropriate disclosure and standard methodology of treatment of such fees.


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