Debt paper: Rule change likely for Mutual Fund investment
· Investment limit in a single issuer to be changed to less than 15%, depending on the rating of the paper.
· At present, Securities and Exchange Board of India restricts investment in rated investment grade debt instruments issued by a single issuer to 15 per cent of the scheme’s Net Assets Value
· About Rs 1 lakh crore of mutual funds’ assets under management exposed to papers perceived to be high risk
· SEBI wants mutual funds to stop relying on credit rating agencies, build own risk assessment system
· SEBI asks fund houses to follow best practices guidelines on upfront commission.