Sebi tweaks eligibility norms, paves way for fintech firms to set up AMCs

Entity can sponsor an MF even if it doesn't fulfill profitability rule; CIRP cos asked to have at least 5% public float

The Securities and Exchange Board of India (Sebi) on Wednesday paved the way for fintech companies and other start-ups to set up asset management companies (AMCs) by tweaking the eligibility criteria. The market regulator also tightened the shareholding norms for companies relisting after undergoing the corporate insolvency resolution process (CIRP) to ensure fair price discovery.

Sebi said an entity would be allowed to sponsor a mutual fund even if it didn’t fulfil the profitability requirement. However, the entity would need to have a net worth of Rs 100 crore. At present, MF sponsors need to have a profitability track record and