Mumbai: Market regulator Sebi on Monday asked mutual funds to limit their net investments in money market instruments in a single entity at 30% within three months, a move that will help them diversify their funds.
“AMC (Asset Management Companies) shall ensure compliance (of capping their investments at 30%) within a period of three months from the date of notification,” the market regulator said in a statement.
Welcoming the decision, SMC Capital equity head Jagannadham Thunuguntla said, “This is a good step by Sebi to encourage mutual funds managers to allocate their assets in defined asset classes.”
Sebi, in a notification on 5 June said that no mutual fund scheme should invest more than 30% of its net assets in money market instruments of an issuer like commercial papers among others.
However, the cap will not be applicable for investments in government securities, treasury bills and collateralised borrowing and lending obligations, it had said.