The markets regulator, Securities and Exchange Board of India (Sebi) has set up a working group to assess the liquidity risk management of debt funds. The working group is tasked to tweak the liquidity forms for debt funds, especially open ended, said two people with direct knowledge of the matter.
“A 10% exposure to liquid assets, stress testing, gating of redemptions to prevent a run on the fund, a relook at side-pockets whether norms need to be revisited are some of the broad terms of reference. This to ensure that liquidity and risk management norms are adequate for open ended debt funds," said the first of the two people quoted above.