SEBI is likely to ease investment guidelines for fund houses. The market regulator is looking to allow fund houses to take exposure to derivative instruments by just sending a notice intimating unit holders about this, said three people aware of the development. This was discussed at the meeting of Mutual Fund Advisory Committee (MFAC) held recently in Mumbai.
If this goes through, fund managers can take exposure to such instruments after 30 days of putting up a public notice. Also, fund houses need not wait for the SEBI approval. Currently, fund houses are required to take approval of at least 75% of unit holders to incorporate such a change in the scheme which is time-consuming.
Typically, fund managers take exposure to derivative instruments to hedge their portfolio. This strategy works well in volatile market conditions.
SEBI has asked AMFI to work on the modalities and send it the market regulator soon. AMFI is likely to discuss in the upcoming board meeting scheduled to be held on December 13.