MF exposure limits reduced by SEBI

The Securities and Exchange Board of India (SEBI) tightened the rules on mutual fund exposure to corporate bonds by capping the investment limit in debt securitiesissued by a single company at 10% down from 15% of the net asset value of a scheme. The changes followed the crisis at JP Morgan Mutual Fund because of its exposure to the debt securities of Amtek Auto.

• The sector-specific exposure limit has also been reduced from the current 30% of the NAV to 25%.
• In the case of housing finance companies, the additional exposure cap has been cut to 5% from 10%.