Sebi asks mutual funds to shift all investments to listed securities

Under the new proposed prudential framework, mutual funds would invest only in listed or to-be-listed equity shares and debt securities

With an aim to safeguard mutual fund investors from high-risk assets, regulator Sebi wants fund houses to shift all their investments to listed or to-be-listed equity and debt securities in a phased manner and reduce their exposure to unrated debt instruments from 25 per cent to only 5 per cent.

Exposure to risky debt securities has emerged as a major risk for the capital market investors, including those coming through the mutual fund space, and the regulator has been making efforts to enhance its regulatory safety net against such risks.

Taking forward certain decisions approved by Sebi's board earlier in