SEBI Proposes Major Overhaul in Mutual Fund Investment Rules
The Securities and Exchange Board of India (SEBI) has introduced a set of proposed changes aimed at reshaping how mutual funds operate. A key proposal is to allow fund houses to offer both “value” and “contra” investment strategies simultaneously—currently treated as distinct categories. SEBI suggests that these funds could share up to 50% portfolio overlap. Additionally, SEBI is considering allowing residual funds in equity schemes to be invested in alternative assets like debt instruments, gold, silver, REITs, and InvITs. This would enhance diversification and improve fund flexibility. SEBI also aims to streamline mutual fund categories to reduce investor confusion. The public has been invited to submit feedback until August 8. If implemented, the new rules could improve transparency, boost investor confidence, and allow fund managers more flexibility in portfolio construction. Experts say these reforms could make mutual fund investments more robust and reflective of evolving market dynamics.
