Market Regulator SEBI Launches New Category Of Flexi Cap Fund Under Equity Scheme | SEBI approves launch of new category of flexi cap fund under equity scheme

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  • Market Regulator SEBI Launches New Category Of Flexi Cap Fund Under Equity Scheme

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Earlier on Thursday, SEBI increased the limit for overseas investment in mutual funds. This limit has now increased from $ 300 million to $ 600 million for individual fund houses

  • Mutual funds will also have the option to convert their current scheme to a flex cap fund.
  • If mutual fund companies want, now they can also launch new schemes under it. The scheme will be named after the category

The market regulator Securities and Exchange Board of India (SEBI) has launched a new category in mutual funds. This category will be called Flexi Cap. As the name itself suggests, SEBI wants to provide more flexibility in mutual funds.

Guidelines were released in the year 2017

Let us know that in October 2017, SEBI had issued guidelines for classification and rationalization for mutual fund schemes. On this basis, it launched several new categories. Now SEBI has launched a new category Flexi Cap Fund, following the advice of the Mutual Fund Advisory Committee.

There will be a new category under the equity scheme

The flexi cap fund will be under the equity scheme. Under this, 65% of the total assets can be invested in equity and equity related resources. It will be an open-ended dynamic equity scheme that will invest in all large-cap, mid-cap and small-cap stocks.

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The name of the scheme will be in the name of the category

To make it easier for investors to identify it, SEBI has ordered the mutual fund to name the scheme on the category of the scheme itself. Mutual funds will have the option to convert their current scheme to a flex cap fund. Also, if mutual funds want, now they can also launch new schemes under it.

Overseas investment limit increased

Earlier on Thursday, SEBI increased the limit for overseas investment in mutual funds. The limit for individual fund houses has now increased from $ 300 million to $ 600 million. Apart from this, the limit of investment in Overseas ETFs by domestic mutual funds has also been increased from $ 50 million to $ 200 million.

The amount invested in the scheme document will also have to be mentioned

SEBI said that the mutual fund houses which are considering to introduce new schemes or ETFs related to foreign investment, should make sure that the amount invested by them should also be mentioned in the scheme documents. These documents are valid for six months from the last date of NFO. After this, SEBI said that mutual funds would not have the opportunity to invest unutilized limit balances in foreign market securities or ETFs.

Schemes investing in or allowing foreign market or ETFs can invest up to 20 per cent of the three-month average asset under management (AUM) in the foreign market.

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