SEBI liberalises Mutual Funds Lite framework, introduces new product bridging MF and PMS

The Securities and Exchange Board of India (SEBI) held its board meeting yesterday and announced a slew of measures. In a key decision, the board has liberalised Mutual Funds Lite (MF Lite) framework for passively managed schemes of mutual funds under which there would be a series of relaxed regulatory requirements designed to facilitate easier entry into the mutual fund market. Barriers related to net worth, track record, and profitability would be reduced.

SEBI also announced changes to regulations governing ODI (Offshore Derivative Instruments) disclosures as it said that a monitoring and compliance mechanism will be established to ensure that ODI-issuing Foreign Portfolio Investors (FPIs) submit relevant information about ODI subscribers to the depositories as well as segregated portfolio-level information to the Designated Depository Participant (DDP) or Custodian.

 

SEBI has introduced a new investment product bridging mutual funds & portfolio management services. Offerings under the new product will be referred to as 'Investment Strategies', to maintain a clear distinction from the schemes offered under the traditional mutual funds. The minimum investment limit for the new product will be ₹10 lakh per investor across all investment strategies of the new product in a particular AMC. The new product is intended to add depth and variety to the investment landscape of the country through a new asset class, the market regulator said in its press release.

The Board reviewed the performance of the Beta version of the optional T+0 settlement cycle and approved that the number of scrips eligible for trading under the optional T+0 settlement will be increased in a phased manner from the 25 to the top 500 in terms of market capitalisation. SEBI approved total 17 proposals, including amendments to insider trading rules.

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