Sebi may soon tighten norms for liquid funds, says report

Securities and Exchange Board of India (Sebi) is likely to tighten norms for liquid funds soon, reported The Economic Times.

Sebi is considering various proposals to ensure that there will be minimum investments in short-term government bonds and also to introduce stricter valuation norms, three people familiar with the matter told the newspaper .

In addition, a plan is being formulated for the introduction of lock-in for investments in liquid funds, said the report.

These proposals, as per the report, are likely to be taken up in the Sebi’s board meeting scheduled for next month.

According to the report, the steps by the regulator to tighten the rules is linked to the crisis that had hit the IL& FS recently. This has prompted the regulator to take steps that will ensure that liquid funds will keep a minimum amount in treasury bills.