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The Securities and Exchange Board of India (Sebi) on Friday tightened norms for mutual funds (MFs) when valuing a debt paper downgraded to below investment grade below BBB-).
According to industry officials, different mark-downs taken by fund houses on recently downgraded papers might have prompted the regulator to announce the norms.
Sebi’s circular said that all money market and debt securities rated below investment grade shall be valued at the price provided by the valuation agencies.
Till the time these valuations are computed, the agencies will have to provide indicative haircuts for the downgraded debt papers. The haircuts would be
