SEBI announces MF Lite framework for passive funds

Market Regulator SEBI announced a much awaited liberalised Mutual Funds Lite (MF Lite) framework for passively managed schemes of mutual funds.

In a press release post the SEBI Board meet, the regulator noted that under the MF Lite framework there would be a series of relaxed regulatory requirements designed to facilitate easier entry into the mutual fund market. The first being eligibility criteria for sponsors.

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Under the framework,  the barriers related to net worth, track record, and profitability would be lowered, allowing more entities to enter the mutual fund space. Secondly, simplified responsibilities for trustees are expected to ease compliance burdens and encourage new market participants. Third, in regards to approval Process and Disclosures, the amendments would allow for streamlining the approval process and reducing the disclosure obligations for passive schemes, making it less cumbersome for asset management companies (AMCs) to operate in this segment.