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SEBI allows fintechs to apply for mutual fund licenses with relaxed norms

The market regulator has relaxed the profitability criteria for companies looking to start mutual fund businesses

December 16, 2020 / 07:42 PM IST
(Image: Forbes)

(Image: Forbes)

In its board meeting held on Wednesday, the Securities and Exchange Board of India (SEBI)  decided that even sponsors that don’t meet the profitability criteria can apply for mutual fund (MF) licenses.

“This move will help fintechs that are looking at entering the mutual fund (MF) industry to seek MF license,” says the chief executive officer of a fund house, requesting anonymity.

However, the fintech company will have to demonstrate the existence of a Rs 100 crore net-worth in the mutual fund, till it records five years of continuous profitability.

Easing of norms