SEBI to address AMFI concern on multi-cap fund investment norms

Suresh P Iyengar Mumbai | Updated on September 22, 2020 Published on September 22, 2020

Ajay Tyagi, SEBI chairman

The recent mandatory multi-cap fund investment of 25 per cent each in large, mid and small caps was implemented to ensure the fund remains true to its label, says SEBI chief

SEBI is considering a proposal of Association of Mutual Funds in India on the recent changes made in învestment norms of multi-cap funds and reiterated that it is not in favour of forcing mutual funds to învest in something which not in the interest of investors.

Addressing the 25th Annual General Meeting of AMFI, Ajay Tyagi, Chairman, SEBI said the recent mandatory multi-cap fund învestment of 25 per cent each in large, mid and small caps was implemented to ensure that the fund remains true to its label.


"It is not the intention of the regulator to force the industry to invest in anything. In this regard, AMFI has made its representation which is being examined actively, and the announcement would be made soon," he added without committing on whether a new 'flexi-cap' category is being considered.

On upfront margin norms

On the upfront margin norms for equity trading, Tyagi said the initial hiccups have settled down, and markets have well adjusted to the new normal.


Justifying the upfront margin, he said on an average about six lakh new demat accounts were opened in a month. Still, since June 10 lakh new accounts are being opened a month, indicating the influx of retail investors in the equity market.

As a regulator, he said it is the responsibility of SEBI to make the market more transparent and ensure that a power of attorney given by investors are not misused.

"We have observed that margins are collected in pool account, and funds of one investor is used for others besides ploughing it through proprietary account leading to brokers default in recent times. This issue has been addressed by the new upfront margin norms, and there are no plans to have a relook at it," he said.

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Published on September 22, 2020
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