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Corporate Laws Central Ministry of Finance Securities and Exchange Board of India Act, 1992

Ease of doing business - Streamlining of prudential norm for passive schemes regarding exposure to securities of group companies of the sponsor of Mutual Funds

08-Jul-2024 | SEBI/HO/IMD/IMD-PoD-2/P/CIR/2024/098

SEBI has issued a circular on Ease of doing business - Streamlining of prudential norm for passive schemes regarding exposure to securities of group companies of the sponsor of Mutual Funds.

By virtue of the circular, following has been decided:

1. Equity oriented ETFs and Index Funds, based on widely tracked and nonbespoke indices, can make investments in accordance with the weightage of the constituents of the underlying index. However, such investments shall be subject to an overall cap of 35% of net asset value of the scheme, in the group companies of the sponsor.

2. Widely tracked and non-bespoke indices shall be indices that are tracked by passive funds or act as primary benchmark for actively managed funds with collective Assets under Management (AUM) of INR 20,000 Cr. and above.

3. The list of indices based on the criteria above, shall be determined on half yearly basis as per the above specified AUM threshold as on March 31st and September 30th respectively. The list of such indices shall be updated by AMFI and published on its website by April 15th and October 15th respectively every year, after seeking SEBI's approval.

4. Based on the criteria specified at paragraph above, the list of indices as on June 30, 2024 is provided at Annexure A of attachment.

For more details refer the attachment.

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