SEBI issues timelines for rebalancing portfolios of mutual fund schemes
Zee News
The mandated rebalancing period for all mutual fund schemes, except Index Funds and Exchange Traded Funds (ETFs) is 30 business days.
New Delhi: Markets regulator Sebi on Wednesday came out with timelines for rebalancing of portfolios of mutual fund schemes in order to bring uniformity. Issuing a circular, the watchdog said the rebalancing period will be applicable in the event of deviation from mandated asset allocation mentioned in the Scheme Information Document (SID) due to passive breaches.
Passive breaches are generally that have not arisen due to omission and commission of Asset Management Companies (AMCs).
The mandated rebalancing period for all mutual fund schemes, except Index Funds and Exchange Traded Funds (ETFs) is 30 business days.
In case, the rebalancing is not done within the mandated timelines, justification in writing, including details of efforts taken to rebalance the portfolio should be placed before the investment committee concerned. The committee can extend the timelines up to 60 business days from the date of completion of mandated rebalancing period.
According to Sebi, if the portfolio of schemes is not rebalanced within the extended timelines, then the AMCs would not be permitted to launch any new scheme till the time the portfolio is rebalanced.
