Sebi working on new norms to label risks for various MF categories

After overhauling the investment framework for multi-cap schemes, markets regulator Securities and Exchange Board of India (Sebi) is working on the new guidelines for calculating and labelling risks for various categories.

Depending on the risk profile, mutual fund (MF) schemes are currently divided into five buckets, ranging between ‘low risk’ and ‘high risk’. Sources said Sebi could introduce another category which could be termed ‘extreme’ or ‘very high’ risk to help warn investors.

Sources said on the equities side, schemes with very high exposure to the small-cap universe could be placed in this category. On the debt side, credit risk