Mumbai: The Securities and Exchange Board of India (Sebi) has asked mutual fund to invest more in their own schemes in an attempt to align the interest of the asset managers in line with the unitholders. Fund houses will now have to invest between 0.03% and 0.13% of their asset bases in their own schemes.
The extent of such investments will depend on the risk level of the scheme and whether it is categorised into low, low-to-moderate, moderate, moderately-high, high and very-high. The risk profile will be as per the existing labels under the risk-o-meter framework.
Currently, fund houses are required to invest a maximum of ₹50 lakh in the scheme, irrespective of the size of the scheme. With actively-managed equity funds managing ₹11.70 lakh crore, AMCs would have to invest roughly close to ₹1,200 crore in equity schemes alone to fulfil these requirements. The regulator has given fund houses 270 days or time up to May 2022 to fulfil this requirement.
“The new requirements link investments to the risk level of the scheme, its size and there is no upper cap,” said the CEO at a domestic fund house.
The investment in the scheme by the fund house will have to be maintained at all points of time till the completion of tenure of the scheme or till the scheme is wound up. AMCs shall conduct a quarterly review to ensure compliance with the requirement of investment of minimum amount in the scheme which may change either due to change in value of the AUM or in the risk value assigned to the scheme.