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SEBI Increases Investment Limit of Mutual Funds

Published on December 02, 2022
Current Context: The Securities and Exchange Board of India (SEBI) increased the investment limit of mutual funds in debt instruments issued by a single user.
SEBI Increases Investment Limit of Mutual Funds
  • The investment limit was increased from 10% to 12% of the Net Asset Value (NAV) and became effective on 29th November 2022.
  • The new regulation was issued by SEBI in the exercise of its powers conferred under Section 11 (1) of the SEBI Act 1992 along with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations 1996.
  • For the enhanced limit, mutual funds will require prior approval from the Board of Trustees and Directors of the Asset Management Company (AMC).
  • The following are the limits of investment under MF Schemes:
  1. Not more than 10% of NAV in debt and money market securities rated AAA
  2. Not more than 08% of NAV in debt and money market securities rated AA
  3. Not more than 06% of NAV in debt and money market securities rated A
  • SEBI is a regulatory authority under the Ministry of Finance and was established in 1992 with its headquarters in Mumbai, Maharashtra. Madhabi Puri Buch is the current Chairperson of the body.

Question:

Q.1 Recently SEBI increased the investment limit of mutual funds in debt instruments issued by a single user to?
a. 10%
b. 12%
c. 15%
d. 17 %
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