Sebi has requested mutual funds to categorise all debt schemes by way of potential threat class matrix
Markets regulator Sebi has requested mutual funds to categorise all debt schemes by way of a possible threat class matrix, based mostly on curiosity and credit score threat.
For this function, a show desk has been made necessary from December 1, 2021, the Securities and Exchange Board of India (Sebi) stated in a round.
“It has been decided that all debt schemes also be classified in terms of a Potential Risk Class matrix consisting of parameters based on maximum interest rate risk (measured by Macaulay Duration (MD) of the scheme) and maximum credit risk (measured by Credit Risk Value (CRV) of the scheme),” Sebi stated.
The determination has been taken based mostly on the advice of the Mutual Fund Advisory Committee (MFAC) and discussions held with the mutual fund trade.
Sebi stated asset administration firms can have full flexibility to position single or a number of schemes in any cell of the Potential Risk Class matrix.
For the aim of alignment of the prevailing schemes with the provisions of the brand new framework, every scheme will probably be positioned in one of many 9 cells specified by the regulator, whereas retaining their current scheme class as specified below ‘Categorisation and Rationalisation of Mutual Fund Schemes’.
This wouldn’t be thought of as a change in basic attribute.
