Image Source : Mint
India’s market regulator SEBI has released a fresh consultation paper aimed at refining the categorization and rationalization of mutual fund schemes, seeking public feedback on proposed changes.
Key takeaways:
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The paper suggests streamlining scheme categories to reduce duplication and investor confusion.
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It proposes clearer definitions for equity, debt, hybrid, and solutionoriented funds, aligning them with investment objectives and risk profiles.
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SEBI aims to ensure that each fund house offers only one scheme per category, enhancing comparability across AMCs.
Proposed structural changes:
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Introduction of stricter norms for naming conventions to reflect actual risk and strategy.
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Enhanced disclosure requirements to improve transparency and investor understanding.
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Rationalization of scheme attributes including asset allocation, benchmark selection, and lockin periods for solutionoriented funds.
Next steps:
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Stakeholders are invited to submit comments before final regulations are framed.
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The move is expected to simplify fund selection and foster longterm investor confidence.
Sources: SEBI, Grant Thornton Bharat, ClearTax, PwC India
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