Sebi wants MFs to be agile in stress events, warns industry on mis-selling

The regulator in the past had also asked the industry to focus more on driving the growth of direct plans

The Securities and Exchange Board of India’s (Sebi’s) whole-time member G Mahalingam on Thursday pointed out that the risk-management practices of the Rs 27-trillion mutual fund (MF) industry can improve further. He urged MFs to create a framework that makes them gauge liquidity risks in a timely manner and mitigate liquidity pressure during stress scenarios.

The senior Sebi official said a tightening of norms in liquidity and overnight schemes that came in last year should be seen as nudges by the regulator to improve risk management practices of the industry.

While speaking at the 14th edition of CII Mutual Fund