Sebi to tighten norms for MF industry's loan-against-shares exposure

Mulls listing of promoter-backed debentures; disclosing LAS risks in MF schemes

The Securities and Exchange Board of India (Sebi) is likely to lay down a slew of measures to improve transparency and risk-management practices for the mutual fund (MF) industry’s loan-against-shares (LAS) exposure.

Recently, the stress in LAS exposure prompted fund houses to take divergent action, in the absence of formal norms governing such investments.

According to people in the know, the market regulator is considering mandatory listing of LAS-related debentures, so that these entities are required to disclose financials and keep investors abreast of company-specific developments.

“There are many LAS-related entities that are unlisted. Currently, there is no such requirement