Sebi to issue MF light regulations for passive funds to ease compliance
Markets regulator Sebi will come out with a mutual fund light regulations for passive funds as part of efforts to reduce the compliance burden, foster growth as well as lower costs to investors, a senior official said on Friday.
Passive funds is an investment vehicle that tracks a market index or a specific market segment. These funds include passive index funds, Exchange Traded Funds (ETFs), and Fund of Funds investing in ETFs.
The regulator is looking to reduce compliance requirements for passive funds that are tied to changes in the underlying index and operate on a non-discretionary basis.
To accommodate passive investments, such as index funds and ETFs, the regulator is introducing mutual fund light regulations, Sebi Whole Time Member Ananta Barua said.
"These regulations will provide greater flexibility for index funds and ETFs, enabling them to offer transparency, diversification, and lower costs to investors.
"By easing the compliance burden, Sebi aims to foster the growth