Sebi to mutual funds: Protect investors in small and mid-cap plans

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Key Points

) has prescribed measures, such as potentially moderating flows into such funds and safeguarding unit holders from sudden redemptions, according to a letter sent to fund houses by the..

Final decision on what measures to implement are left to the funds...

Small- and mid-sized stocks have powered the record rally in Indian shares in the past year, with funds focused on this segment witnessing a 67% surge in assets to 5.3 trillion rupees ($63 billion) last month compared to a year earlier, according to AMFI data...

Sebi Chairperson Madhabi Puri Buch in January said the regulator is stress-testing such funds to gauge their resilience in the event of sharp market declines or sudden redemptions...

Kotak Asset Management Co. this week imposed limits on flows on recurring plans in its small-cap fund, citing the sharp surge in this segment that has led to valuation distortions in some cases...

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