Sebi tweaks norms for passive mutual fund schemes

The Securities and Exchange Board of India (Sebi) has revised norms on investments by passively managed mutual fund schemes in the group companies of their sponsors.

The new rules mandate that no mutual fund scheme should make any investment in the listed securities of group companies of the sponsor in excess of 25% of the net assets of the scheme, except for investments by equity oriented exchange traded funds (ETFs) and index funds.

Equity oriented ETFs and index funds, based on widely tracked and non-bespoke indices, can make investments in line with the weightage of the constituents of the underlying index.