Home / Markets / News / No merit in relaxing 10% cap on single stock investment: Sebi chief

No merit in relaxing 10% cap on single stock investment: Sebi chief

Says cap is meant for diversification, and just because some scrip is outperforming is no reason to raise the ceiling

Premium

Ajay Tyagi, Sebi chairman (Photo: Kamlesh Pednekar)

4 min read Last Updated : Oct 22 2020 | 12:48 AM IST

Markets regulator Securities and Exchange Board of India (Sebi) sees no merit in relaxing the 10 per cent investment cap on a single stock for actively-managed mutual fund (MF) schemes, its chief said on Wednesday.

“The 10 per cent cap is meant for diversification. Just because some scrip is outperforming doesn’t mean you raise the ceiling. That will be self re-enforcing that a scrip has moved up and you are allowing higher investment in the same scrip. For the sake of diversification, the 10 per cent ceiling is something which stays,” said Ajay Tyagi, chairman of Sebi, while addressing the

Topics : Sebi Sebi norms Investor Protection Fund MF schemes Mutual fund schemes Mutual Fund investments Market news Securities and Exchange Board of India Ajay Tyagi

What you get on BS Premium?

Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
Pick your 5 favourite companies, get a daily email with all news updates on them.
Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
Preferential invites to Business Standard events.
Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.

VIEW ALL FAQs

Need More Information - write to us at assist@bsmail.in