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Sebi's multi-cap fund norms may see Rs 25-35K crore move from largecaps to mid and smallcaps

Currently 70-75 percent of total equity allocation is towards largecaps, 15-20 percent midcaps and 5-10 percent in smallcaps.

September 15, 2020 / 06:05 PM IST

The Securities and Exchange Board of India (Sebi) on September 11 changed the investment norms for multi-cap funds, saying a minimum of 25 percent of the corpus should each be invested in large, mid and smallcap stocks.

As a result, the minimum investment in equity and equity-related instruments by mutual fund houses has to be 75 percent of total assets, against 65 percent earlier.

"Minimum investment in equity and equity-related instruments of large cap, midcap and smallcap companies needs to be 25 percent each of the total assets," the capital markets regulator said in a circular.

"All the existing multi-cap funds shall ensure compliance with the above provisions within one month from the date of publishing the next list of stocks by AMFI, ie January 2021."