Sebi may tweak norms to allow more flexibility to equity fund managers

In October 2017, Sebi came out with the scheme classification norms to ensure that mutual fund schemes make investments in-line with their stated scheme mandate

The Securities and Exchange Board of India (Sebi) is considering changing scheme categorisation norms to allow more flexibility to equity fund managers when managing their large- and mid-cap portfolios.

According to sources, fund houses have approached the market regulator to widen the universe of stocks that are currently categorised as large-caps and mid-caps.

"Sebi is consulting mutual fund houses to understand the challenges. This would help mutual funds (MFs) limit unnecessary churn of stocks to fall in-line with the updated list of stocks, issued every six months," said the chief executive of a fund house.  

Under the existing norms, the top