In its inspection, SEBI has found that some debt schemes were violating SEBI rules.
SEBI chief U K Sinha while addressing the media on the sidelines of 10th CII Mutual Fund Summit hinted that it can take stringent action against fund houses which are found violating debt fund norms.
In its inspection, SEBI found that some schemes were violating SEBI rules which require debt funds to have a minimum of 20 investors with no single investor holding more than 25% of the net assets of a scheme.
Sinha said that in some cases it was a passive violation when investors moved out of schemes during quarter end which resulted in higher concentration of existing investors.
"Some debt schemes are operating with a very low AUM. There are 69 schemes which have violated the norms. In one instance we found that a single investor had 98% concentration in a scheme. We have given soft instructions as of now. We can take strict action if they don't comply," he pointed out.
To fix this issue SEBI has come out with fresh regulations for debt funds. SEBI has asked fund houses to maintain a minimum of Rs. 20 crore AUM in debt funds on half yearly rolling basis in all open ended debt oriented schemes.
SEBI has also asked fund houses to keep the minimum subscription amount in debt and balanced schemes at Rs. 20 crore during a new fund offer.
The regulator has given one years’ time for existing schemes to comply with SEBI’s new rules. "I hope fund houses comply with our rules swiftly and not take one year," he added.
