SEBI Actively Looking At Mutual Fund Re-Categorisation: Chairman Ajay Tyagi
The Securities and Exchange Board of India is actively looking at re-categorisation of midcap and small cap mutual fund schemes, Chairman AJay Tyagi said after the capital market regulator’s board meeting on Monday.
The move is expected to permit these products to invest in a wider set of stocks, said industry experts.
In order to ensure uniformity in respect of the investment universe for equity schemes, SEBI had in 2017 defined what constitutes large cap, midcap and smallcap. Top 100 companies in terms of market capitalisation come under the large cap segment, while the 101st to 250th firms falls under midcap and 251st company onwards come under small cap.
"We are actively looking at re-categorisation of mutual funds and will come out with guidelines," Tyagi told reporters here after the board meeting.
It is expected that the regulator would ease framework to include more stocks under the small cap and midcap categories, experts added.
The SEBI board approved a proposal to amend mutual fund regulations that will allow bank and non-bank custodians to offer custodian services for gold or gold-related instruments such as gold exchange traded funds. The move is aimed at reducing concentration of custodial services for gold or related instruments, the markets regulator said.
In order to bring uniformity, the board has also decided to allow sponsor, or asset management company, to invest in close-ended mutual fund schemes. At present, the investment by the sponsor or asset management company is mandatory in all mutual fund schemes, except closed-ended schemes.
Additionally, the SEBI board has approved amendment to depositories and participants regulations, wherein the word pledge will include re-pledging of securities for margin or settlement obligations of the client.
The capital market regulator's budget for 2020-21 too was approved in the meeting.