Now, mutual fund companies will have to invest in their own scheme based on its risk level.
SEBI has done away with the existing norms on skin in the game in which fund houses have to invest 1% of the amount raised during NFO or Rs.50 lakh, whichever is lower. In fact, it has asked fund house to invest based on risk level of the scheme.
Prima facie, it looks like fund houses will have to invest more in riskier schemes like equity funds compared to less risky schemes like debt funds. However, SEBI is yet to clarify how the new skin in the game norms will be put in practice.
The decision was taken at the SEBI board meeting held today. Here are other key highlights of the meeting:
- SEBI has eased regulations for Indian fund managers to manage overseas assets. Now, fund managers can manage funds which are raised by registering or incorporating a fund outside India
- Minimum ticket size in REITs and InVITs has been reduced substantially. With this, issuers of REITs and InVITs can issue application form in the range of Rs.10,000-15,000 for a single unit
- InVITs should have at least five unitholders holding not less than 25% of the total capital
