Sebi extends rebalancing timeline rule to all passive MF breaches
Market regulator Sebi on Thursday said that timelines for portfolio rebalancing in mutual fund schemes will now be applicable to all types of passive breaches across actively managed schemes, which was earlier limited to only asset allocation.
Tired of too many ads?
Remove Ads
Tired of too many ads?
Remove Ads
Market regulator Sebi on Thursday said that timelines for portfolio rebalancing in mutual fund schemes will now be applicable to all types of passive breaches across actively managed schemes, which was earlier limited to only asset allocation A passive breach refers to unintended deviations from the mandated asset allocation or regulatory limits that do not arise from the direct actions or omissions of asset management companies (AMCs).Passive breaches generally do not happen due to the omission and commission of Asset Management Companies (AMCs). The mandated rebalancing period for all mutual fund schemes, except Index Funds and Exchange Traded Funds (ETFs), is 30 business days.Such breaches may be caused by corporate actions, significant price movements in underlying securities, maturity of instruments, or large-scale investor redemptions.The clarification came in the wake of a recommendation made by the Mutual Funds Advisory Committee (MFAC) and is aimed at ensuring consistency in regulatory compliance and enhancing investor protection."In view of...the recommendation of the Mutual Funds Advisory Committee (MFAC), it is clarified that the provisions shall be applicable for all types of passive breaches for the actively managed mutual fund schemes," the Securities and Exchange Board of India (Sebi) said in a circular.The regulator said that provisions for mutual funds will now apply to all such breaches, mandating timely rebalancing even when the deviations are not deliberate.The regulator also underlined that while active breaches are considered violations of the Sebi mutual fund regulations, passive breaches often stem from external factors and market dynamics.Despite their unintentional nature, these breaches could still affect the risk profile of schemes, making it necessary to rebalance portfolios within a stipulated time frame, Sebi said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
33 minutes ago
- Time of India
Jio Financial shares surge nearly 5% after Sebi greenlights Jio BlackRock broking business
Synopsis Jio Financial Services shares surged 4.36% to Rs 326.65, fueled by SEBI's approval for Jio BlackRock Broking Private Limited to operate as a stockbroker and clearing member. This registration, granted on June 25, 2025, allows JFS to expand its capital market presence, offering broking and clearing services.
&w=3840&q=100)
Business Standard
an hour ago
- Business Standard
Jio Financial stock hits 6-mth high, soars 5% on heavy volumes; here's why
Jio Financial share price rises on Friday: BlackRock Broking Private Limited has received regulatory approval from the Sebi to commence operations as a brokerage firm in India. SI Reporter Mumbai Jio Financial Services share price Shares of Jio Financial Services (JFSL) hit a six-month high of ₹327.75, as they surged 5 per cent on the BSE in Friday's intra-day trade amid heavy volumes following the news that the market regulator - the Securities and Exchange Board of India (Sebi) granted a certificate of registration to Jio BlackRock Broking Private Limited to act as a stock broker/clearing member. The stock price of JFSL was trading at its highest level since December 18, 2024. In the past six trading days, the stock has rallied 15 per cent. It has bounced back 65 per cent from its 52-week low level of ₹198.60, which touched on March 3, 2025. The stock had hit a 52-week high of ₹363 on September 27, 2024. At 11:18 AM; JFSL was quoting 3.6 per cent higher at ₹323.55, as compared to 0.2 per cent gain in the BSE Sensex. The average trading volumes at the counter jumped nearly 1.5 times, with a combined 31.19 million shares changing hands on the NSE and BSE. Why are Jio Financial Services shares in focus? JFSL today announced that the Sebi has granted a certificate of registration dated June 25, 2025 to Jio BlackRock Broking Private Limited (JioBlackRock Broking), to act as a stock broker / clearing member. JioBlackRock Broking said it aims to bring affordable, transparent, and technology-driven execution capabilities for Indian investors. The broking entity's parent company, JioBlackRock Investment Advisers is a 50:50 joint venture between JFSL and BlackRock Inc. Along with the recent regulatory approvals received by Jio BlackRock Asset Management Private Limited and JioBlackRock Investment Advisers to commence operations, receipt of the broking license enables the JioBlackRock joint venture to offer holistic investment solutions to the people of India, the company said. Earlier, on June 11, the company said the Sebi, vide letter dated June 10, 2025, granted certificate of registration to Jio BlackRock Investment Advisers Private Limited (JBIAPL) to act as an investment adviser. Further, the Sebi, vide letter dated May 26, 2025, has granted certificate of registration to 'Jio BlackRock Mutual Fund'; and approval to Jio BlackRock Asset Management Private Limited to act as the Asset Management Company for 'Jio BlackRock Mutual Fund'. 'These are exciting times for us. Even as JioBlackRock's Asset Management arm introduces innovative mutual funds to the market, and JioBlackRock Investment Advisers prepares to launch operations, the approval for the broking entity adds another dimension to our strategy of democratising investments in India, through easily accessible and digital-first solutions,' Hitesh Sethia, Managing Director and CEO, JFSL said. FY25 performance of JFSL and outlook JFSL reported a healthy pre-provisioning operating profit of ₹1,594 crore for FY2025, including investment income and dividend income. To support growing scale across businesses, JFSL also made equity investments of ₹1,346 crore in group entities including Jio Finance, Jio Payments Bank, and the joint ventures with BlackRock for asset management and wealth management, to enable these entities expand their market presence Driven by significant technological advancements this past year, Jio Payment Solutions, the subsidiary of JFSL, is strategically positioned to pursue a diversified distribution strategy - micro and small merchants onboarding through JioBharat Phones, dedicated engagement channel for large clients, and leveraging the group's ecosystem to acquire enterprise clients. JPSL's focus remains on profitable growth while expanding margins and maintaining unit-level profitability. ALSO READ | About Jio Financial Services Jio Financial Services (JFSL) is a Core Investment Company (CIC), registered with the Reserve Bank of India. JFSL is a new-age institution, which operates a full-stack financial services business through customer-facing entities, including Jio Finance Limited, Jio Insurance Broking Limited, Jio Payment Solutions Limited, Jio Leasing Services Limited, Jio Finance Platform and Service Limited, and Jio Payments Bank Limited.
&w=3840&q=100)
Business Standard
an hour ago
- Business Standard
Credila Fin Services files updated draft for IPO; to raise Rs 5,000 cr
Education loan provider Credila Financial Services has filed its updated draft papers with capital markets regulator Sebi to raise Rs 5,000 crore through the initial public offering (IPO). The proposed IPO comprises a fresh issue of equity shares worth Rs 3,000 crore and an offer for sale (OFS) of shares for Rs 2,000 crore by promoter entity and an investor, aggregating the total size of the public issue to Rs 5,000 crore, according to the updated draft red herring prospectus (UDRHP) filed on Thursday. As part of the OFS route, promoter entity Kopvoorn BV (an affiliate of EQT Private Capital Asia) will sell shares worth Rs 950 crore and HDFC Bank Ltd will be offloading its stake in the company for Rs 1,050 crore. Also, the Mumbai-based Credila Financial Services is looking to raise about Rs 600 crore in a pre-IPO round. If the pre-IPO round takes place, the size of the fresh issue will reduce accordingly. The updated draft filing comes after Credila's confidential offer documents were approved by Sebi last month. The company filed its offer documents in December 2024, through the confidential pre-filing route. Under the confidential filing process, Sebi reviews the confidential DRHP and provides comments on it. Thereafter, the company going public is required to file an update to the confidential DRHP (UDRHP-I) after incorporating the regulator's comments. This UPDRHP-I is made available for public comments for 21 days. Finally, after incorporating the changes due to public comments, the company is required to update the DRHP-II (UDRHP-II). Credila Financial Services can launch its IPO once the final prospectus is filed. Going by the draft papers, the company proposes to utilise the net proceeds towards augmenting capital base to meet its future capital requirements arising out of growth of its business and assets. Founded in 2006, Credila is an Indian education finance company focused on providing education loans to Indian students pursuing higher education in India and overseas. Since its inception, the company have disbursed loans totalling Rs 53,754 crore as of March 31, 2025. According to the industry report, Credila is the largest education-focused non-banking financial company (NBFC) in the country (which peer set comprises three companies, including Credila), with net loans of Rs 41,469 crore as of March 31, 2025, and the highest disbursements of Rs 14,089 crore for FY24, and had reported the highest restated profit after tax of Rs 989.96 crore for the financial year ended March 2025. In 2009, HDFC Ltd made an investment in Credila, and subsequently, it became a subsidiary of the company in 2010. In 2019, it became a wholly-owned subsidiary of HDFC Ltd and converted to a public limited company in the following year. In June 2023, HDFC Ltd amalgamated into HDFC Bank, following which the EQT and ChrysCapital groups collectively acquired approximately 90 per cent stake in the company in March 2024. The change of control came after the Reserve Bank of India (RBI) directed HDFC Bank to reduce its shareholding in the company to less than 10 per cent after the merger of HDFC Ltd with HDFC Bank. Later, EQT and ChrysCapital groups' stake was diluted to 81.42 per cent, with South Korea's Shinhan Bank also acquiring an 11 per cent stake in Credila. The company's shares are proposed to be listed on the BSE and NSE. Axis Capital, Citigroup Global Markets India, Goldman Sachs (India) Securities, IIFL Capital Services and Jefferies India are the book-running lead managers, while KFin Technologies is the registrar for the IPO. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
