Sebi to revamp mutual fund classification, loosen restrictions

The Securities and Exchange Board of India (Sebi) is considering a revamp of the mutual fund (MF) scheme categorization system, according to an official. This move aims to simplify the classification process for investors and ensure transparency in the market.

The current system has several categories and sub-categories, which can be confusing for investors to navigate. By streamlining the classification framework, Sebi hopes to make it easier for investors to understand and compare different MF schemes.

One of the key changes being considered is to reduce the number of categories and sub-categories within the MF scheme classification system. This will help investors make more informed decisions about which funds to invest in, based on their risk appetite and investment goals.

Additionally, Sebi is looking to introduce new criteria for classifying MF schemes, which will be based on factors such as the investment objective, asset allocation, and risk profile. This will enable investors to better understand the underlying characteristics of each scheme and choose the one that aligns with their investment strategy.

The proposed changes to the MF scheme classification framework are aimed at bringing greater clarity and consistency to the market. By simplifying the categorization process, Sebi hopes to enhance investor trust and confidence in the MF industry.

Industry experts have welcomed Sebi’s initiative to overhaul the MF scheme classification system. They believe that the proposed changes will make it easier for investors to compare different MF schemes and select the ones that best suit their investment needs.

Investors are advised to stay informed about the developments in the MF industry and understand how the proposed changes to the classification framework may impact their investment decisions. By keeping abreast of regulatory updates and market trends, investors can make informed choices and build a diversified investment portfolio.

Overall, Sebi’s efforts to revamp the MF scheme classification framework are aimed at promoting transparency, clarity, and investor protection in the market. These changes will benefit investors by providing them with a better understanding of MF schemes and enabling them to make well-informed investment decisions.