Latest news with #MutualFundsAdvisoryCommittee
Time of India
10 hours ago
- Business
- Time of India
Sebi regulations: Tightens rules on portfolio breaches; must rebalance all passive mutual fund breaches within 30 days
The Securities and Exchange Board of India (Sebi) on Thursday tightened compliance norms for mutual fund schemes, regulating that rebalancing timelines will now apply across types of passive breaches in actively managed funds and not just those related to asset allocation. Until now, SEBI's mandate for portfolio rebalancing within 30 business days applied only to passive breaches related to asset allocation. With the new directive, this timeline will now be enforced across the board for all passive breaches in actively managed schemes, excluding Index Funds and Exchange Traded Funds (ETFs). The clarification comes on the after a recommendation by Sebi's Mutual Funds Advisory Committee (MFAC), which pushed for a broader, more consistent approach to compliance. 'In view 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 market regulator said in a circular. While active breaches, caused by direct decisions of the AMCs, are already treated as violations of mutual fund regulations, Sebi acknowledged that passive breaches, though not deliberate, still have the potential to alter the risk profile of investment schemes. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Seniors on SS Get New Benefits WalletJump Learn More Undo As such, timely rebalancing remains essential. What are passive breaches ? A passive breach refers to an unintended deviation from the prescribed asset allocation or regulatory limits, which does not stem from any direct action or inaction by Asset Management Companies (AMCs). These breaches are typically beyond the control of fund managers and may result from events such as corporate actions, sharp movements in the prices of underlying securities, the maturity of instruments, or large-scale investor redemptions. For all mutual fund schemes, excluding Index Funds and Exchange Traded Funds (ETFs), Sebi requires that portfolios affected by such breaches be rebalanced within 30 business days. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
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Business Standard
12 hours ago
- Business
- Business Standard
Sebi extends portfolio rebalancing timelines to all passive breaches in MFs
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 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. (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.)
Economic Times
12 hours ago
- Business
- Economic Times
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 breaches may be caused by corporate actions, significant price movements in underlying securities, maturity of instruments, or large-scale investor 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 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 regulator said that provisions for mutual funds will now apply to all such breaches, mandating timely rebalancing even when the deviations are not 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 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.
