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Business News/ Market / Stock-market-news/  Sebi sets minimum asset limit for debt MF schemes
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Sebi sets minimum asset limit for debt MF schemes

Debt-oriented and balanced MF schemes directed to have a minimum subscription amount of `20 crore at the time of new fund offer

Sebi said many debt-oriented schemes are operating with very low assets under management, or AUM and in the interest of investors, “it is important that debt-oriented schemes have an adequate corpus to ensure adherence to the investment objectives. Photo: Abhijit Bhatlekar/MintPremium
Sebi said many debt-oriented schemes are operating with very low assets under management, or AUM and in the interest of investors, “it is important that debt-oriented schemes have an adequate corpus to ensure adherence to the investment objectives. Photo: Abhijit Bhatlekar/Mint

Mumbai: The Securities and Exchange Board of India, or Sebi, on Friday directed all debt-oriented and balanced mutual fund schemes to have a minimum subscription amount of 20 crore at the time of a new fund offer (NFO). For other schemes, the minimum subscription requirement will be 10 crore.

Sebi said many debt-oriented schemes are operating with very low assets under management, or AUM. “In the interest of investors, it is important that debt-oriented schemes have an adequate corpus to ensure adherence to the investment objectives...," said Sebi.

Additionally, an average AUM of 20 crore on a half-yearly rolling basis has to be maintained for open-ended debt-oriented schemes.

Existing open-ended debt-oriented schemes will be given a year to comply with this norm.

If any open-ended debt scheme happens to be in breach of the latest norms, asset management companies, or AMCs, will be given six months to scale up their assets for compliance.

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ABOUT THE AUTHOR
Anirudh Laskar
Anirudh reports on significant corporate matters including large mergers and acquisitions, India's emerging e-commerce sector and regulatory issues in the corporate and financial services industry. Over the past 17 years, he has covered many beats including banking, NBFCs, aviation, automobile, insurance, markets, SEBI, IRDAI, mutual funds, investment banking, private equity, deals, and conglomerates.
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Published: 20 Jun 2014, 11:59 PM IST
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