MUMBAI: The Securities and Exchange Board of India (Sebi) is considering a series of steps to reduce redemption risks in mutual fund schemes, said two people with direct knowledge of the matter.
One of the ways could be to ask asset management companies (AMCs) to have more investors in a scheme from at least 20 now and the other could be by reducing the investment threshold of an investor in a scheme, these sources said.
Existing Sebi norms for mutual funds require that a fund/scheme has at least 20 investors and that a single investor does not hold more than 25% of the fund's corpus.
Typically, when institutional investors, who have higher amounts invested in a scheme, withdraw their money, it triggers a redemption stress. “The market