Capital market regulator SEBI has allowed stock brokers and clearing members to park client funds in mutual fund overnight schemes as they invest only in risk-free government securities.
Brokers and clearing members should ensure that the overnight schemes invest only in government bond, overnight repo markets and overnight Tri-party Repo Dealing and Settlement (TREPS). Such Mutual Fund Overnight Schemes (MFOS) units should be in dematerialised (demat) form and must necessarily be pledged with a clearing corporation at all times.
