Sebi tightens norms for liquid MFs, takeover regulations of firms under IBC

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The Securities and Exchange Board of India (Sebi) tightened the valuation methodology for liquid mutual funds (MFs) and did away with the open offer exemption given to those seeking to acquire assets undergoing insolvency resolution.

To make sure liquid schemes reflect the underlying portfolio risks, Sebi has said all debt papers with maturity of 30 days or more to be marked to market. Earlier, fund houses didn’t have to do so for securities that had less than 60-day maturity.

The move comes in light of the redemption risks faced by liquid schemes after the Infrastructure Leasing & Financial Services (IL&FS)