Market regulator the Securities and Exchange Board of India (Sebi) is planning to ease the norms for mutual funds (MF) participation in the derivative markets. According to the sources, the regulator is considering measuring such as, allowing domestic funds to 'write' options and increasing cap on F&O investments. The move is a part of Sebi’s efforts to deepen the Indian derivative markets.
Until now, Sebi has adopted a cautious approach towards allowing MFs to invest in derivatives since the asset class is considered highly risky compared to equities or debt. Currently, there are several restrictions on MF investments in equity derivatives.
