In a mild relief to fund houses with respect to their debt holding in their group companies, SEBI has given an option to fund houses to hold debt papers issued by the their group companies until maturity.
However, this relaxation is only applicable on debt instruments, which was in the portfolio of debt funds and liquid funds before October 1, 2019.
In a circular issued today, SEBI said, “The investments of mutual fund schemes in debt and money market instruments of group companies of both the sponsor and the AMC of the mutual fund in excess of the limits specified therein, made on or before October 1, 2019 may be grandfathered till maturity date of such instruments. The maturity date of such instruments shall be as applicable on October 1, 2019.”
Earlier in October, SEBI has put a restriction on such exposures to 10% of the net assets of the scheme. Such investment limit can touch 15% of the net assets of the scheme with the prior approval of the board of trustees.
SEBI has asked fund houses and AMFI to publish list of such holdings on their respective websites from January 1, 2020.
