Mutual funds industry seeks greater leeway for the new asset class

'Easier concentration norms, higher leverage, and approval for securities currently outside MF scope'

The new asset class (NAC) proposed by the market regulator could see diverse product offerings with high-risk strategies across equity and debt if the mutual fund (MF) industry’s recommendations are incorporated into the final regulations.

While the Securities and Exchange Board of India (Sebi) has suggested relaxations in investment norms for NAC compared to traditional MFs, some fund houses are advocating for further relaxations in concentration norms, greater flexibility in leverage, and the ability to invest in securities currently outside the MF domain, such as unlisted debt papers and debentures, sources reveal.

In July, Sebi issued a