The Securities and Exchange Board of India (Sebi) is considering a proposal to tighten the rules for liquid mutual funds holding assets worth Rs 8 lakh crore or more, The Economic Times reported.
The proposal comes following the challenges faced by finance companies after debt default by Infrastructure Leasing & Financial Services (IL&FS), the report said citing three people aware of the development.
The regulator is looking for a short lock-in period for investments in liquid funds, in which investors — mostly large companies — park idle cash, the report said.
The regulator may also make it compulsory for liquid funds to mark to market the value of all bonds that have maturity of 30 days or more and allow separation of debt instruments in the MF portfolios that are in trouble, sources told the paper, adding that these measures are likely to be discussed at the Sebi-appointed mutual fund advisory committee meeting on Monday.
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