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SEBI Proposes Overhaul of Mutual Fund Scheme Categories to Boost Clarity and Efficiency


Updated: July 18, 2025 16:23

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:
  • The paper suggests streamlining scheme categories to reduce duplication and investor confusion.
  • It proposes clearer definitions for equity, debt, hybrid, and solutionoriented funds, aligning them with investment objectives and risk profiles.
  • SEBI aims to ensure that each fund house offers only one scheme per category, enhancing comparability across AMCs.
Proposed structural changes:
  • Introduction of stricter norms for naming conventions to reflect actual risk and strategy.
  • Enhanced disclosure requirements to improve transparency and investor understanding.
  • Rationalization of scheme attributes including asset allocation, benchmark selection, and lockin periods for solutionoriented funds.
Next steps:
  • Stakeholders are invited to submit comments before final regulations are framed.
  • 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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