In the financial arena, changes are requisite. To keep up with the changing times, SEBI (Securities and Exchange Board of India) has made some mutual fund regulations.  These changes aim to protect investors and ensure transparency in the mutual fund industry. SEBI has also taken steps to improve investor awareness and education.

Apart from these key changes, several other changes have been made:

1.   Revised Risk-o-Meter Guidelines

To enhance the clarity and relevance of the risk-o-meter tool, SEBI has revised its guidelines. The risk-o-meter now provides a more granular risk assessment of mutual fund schemes, helping investors make informed decisions based on their risk tolerance.

2.   Tightening of Norms for Debt Funds

Given past instances of credit defaults impacting debt funds, SEBI has tightened the norms for these funds. The new regulations include stricter guidelines on the exposure limits to single issuers and sectors, as well as enhanced credit rating requirements for underlying securities.

3.   New Rules for Index Funds and ETFs**

SEBI has introduced new rules to standardize the operations of index funds and Exchange Traded Funds (ETFs). These changes include guidelines on tracking error disclosures, permissible deviations from the underlying index, and liquidity management.

4.   Sustainability and ESG Mandates

In alignment with global trends, SEBI has placed a strong emphasis on sustainability and Environmental, Social, and Governance (ESG) factors. Mutual funds now need to disclose the ESG aspects of their investments and integrate ESG criteria into their investment processes.