Business Standard

Sebi clarifies on use of segregated portfolio by mutual fund industry

Using the mechanism could impact a fund manager's performance incentives


Photo: Reuters

Jash Kriplani Mumbai
The Securities and Exchange Board of India (Sebi) on Friday issued a detailed circular on the segregated portfolio, which can be used by fund houses if debt assets are downgraded to below investment grade. 

The mutual fund (MF) industry had raised a demand for such a mechanism as instruments below investment grade are highly illiquid.

However, Sebi indicated it doesn’t want the mechanism to become a norm. It said trustees need to put in place a mechanism that negatively impacts the performance incentives of fund managers and chief investment officers involved in the investment process of the segregated assets. The

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Dec 29 2018 | 2:46 AM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on are available only to BS Premium subscribers.

Register to