Multi-cap funds have been around for years. In 2020, SEBI tightened the rules to ensure they diversify as they are mean to. Before that, most multi-cap funds behaved like large-cap funds and had negligible investments in mid- and small-cap stocks. As per SEBI's new definition, multi-cap funds must hold at least 25 percent each of the categories. On the remaining 25 percent, the fund manager is free to take her call. Mutual funds are launching new funds in the multicap category and are moving their erstwhile multicaps to flexicap category, where they still have the flexibility to invest across market caps without restrictions.