Sebi's one-scheme-per-category to shake up mutual funds' industry

Industry players fear several schemes would cease to exist following the Sebi circular

In a move that could lead to a huge overhaul in the Rs 20-lakh-crore mutual fund (MF) industry, market regulator Securities and Exchange Board of India (Sebi) on Friday laid down the framework for the categorisation and merger of schemes.

The market regulator provided for categories of each of the broad segments that include equity, debt, hybrid and solution-oriented schemes. For each of the five segments, Sebi has issued categories. A fund house will be allowed to launch only one open-ended scheme in each of the category.

The regulator, however, has been liberal in framing the categories. It has provided