Regulatory management

Sebi's new circular may lead to an avoidable churn in the market

In a circular last week, the Securities and Exchange Board of India (Sebi) announced a recast of the multi-cap fund category. The regulator decreed that such funds must hold at least 75 per cent of assets in equity, with a minimum of 25 per cent held in each of the large-cap, mid-cap, and small-cap categories. Large-caps are defined as the largest 100 stocks by market capitalisation, mid-caps as the next largest 150 stocks, and small-caps as all stocks below the top 250. The funds have until February 2021 to rejig portfolios, with the Association of Mutual Funds in India (Amfi)