Sebi directs open-ended debt MFs to maintain 10% liquidity buffer

In a circular on Friday, the Securities and Exchange Board of India (Sebi) directed all open-ended debt mutual fund schemes to maintain liquidity buffer.

“All open ended debt schemes (except overnight fund, liquid fund, gilt fund and gilt fund with 10 year constant duration) shall hold at least 10 per cent of their net assets in liquid assets,” said Sebi. Cash, government securities, treasury-bills and repo on government securities qualify as ‘liquid assets.’

At present, there is no such mandate. However, Sebi has been nudging fund