Sebi fixes 25% minimum equity investment for multi cap funds across large, mid and small caps

Market regulator Securities and Exchange Board of India (Sebi) has issued guidelines regarding categorisation and rationalisation of Mutual Fund Schemes, in order to diversify the underlying investments of Multi Cap Funds across large, mid and small cap companies. 

To be true to label, Sebi has decided to partially modify the scheme characteristics of Multi Cap Fund. 
Sebi has fixed the minimum investment in equity and equity related instruments at 75 per cent of total assets in the following manner: 
  • Minimum investment in equity and equity-related instruments of large cap companies-25 per cent of total assets; 
  • Minimum investment in equity and equity-related instruments of mid cap companies – 25 per cent of total assets;
  • Minimum investment in equity and equity-related instruments of small cap companies – 25 per cent of total assets
Sebi has directed all existing Multi Cap Funds to ensure compliance with the provisions within one month from the date of publishing the next list of stocks by AMFI, ie, January 2021. All other conditions specified in circular dated 6 October 2017 shall remain unchanged.
Sebi said the changes in allotment has been made in order  to  protect  the  interests  of  investors  in  securities  and  to promote the development of, and to regulate the securities market.