Latest SEBI Circular on Mutual Fund :-
Latest SEBI Circular on Mutual Fund :- What is the 25% rule of SEBI?
Up to 25% of the underlying foreign scheme should be exposed to Indian securities.This regulation lowers the complexity and expense of investment management by preventing excessive exposure to a single fund or industry.
Indian mutual funds registered with sebi are permitted to invest within the overall cap of
Indian mutual funds must guarantee that foreign unit trusts or mutual funds are pooled vehicles without a separate portfolio. Additionally, foreign mutual funds and unit trusts will need to grant pari-passu or pro-rata rights in the underlying fund, meaning that Indian mutual funds will get a portion of the fund’s earnings or returns based on their contributions. SEBI guidelines for mutual funds 2024
An independent fund manager or investment manager should also oversee such foreign MF/Unit Trusts. According to SEBI, this will guarantee that investments are made independently of investors or other parties.
At least once every quarter, the underlying MF/Unit Trusts will be required to report their holdings. To avoid any conflicts of interest, there should be no agreement between the Indian MF scheme and the underlying MFs/UTs.
Mutual fund advisory committee members / SEBI committee recommendations :-
This follows comments from the Mutual Fund Advisory Committee (MFAC) to SEBI. It is anticipated that the change will assist the Indian mutual fund business in making foreign securities investments, which are now impossible because of a violation in the international investment cap. However, only foreign mutual funds with no more than 25% exposure to Indian stocks are available for investment by Indian fund firms.