SEBI prescribes timelines for rebalancing of portfolios for all Mutual Funds schemes
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- Last Updated on 1 April, 2022
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Circular no. SEBI/HO/IMD/IMD-II DOF3/P/CIR/2022/39, Dated: 30.03.2022
The market regulator has prescribed timelines for rebalancing of portfolios to bring uniformity across Mutual Funds schemes. The SEBI has prescribed that in the event of deviation from mandated asset allocation mentioned in the Scheme Information Document (SID) due to passive breaches, rebalancing period for Overnight Fund scheme will be NA, for all schemes other than Index Funds and Exchange Traded Funds mandated rebalance period be Thirty (30) business days.
In case the portfolio of schemes other than Index Funds and Exchange Traded Funds are not rebalanced within the 30 days mandated timelines, justification in writing, including details of efforts taken to rebalance the portfolio shall be placed before the Investment Committee. The Investment Committee, if so desired, can extend the timelines up to sixty (60) business days from the date of completion of the mandated rebalancing period. Said SEBI
In case the portfolio of schemes is not rebalanced within the aforesaid mandated plus extended timelines, AMCs shall not be permitted to launch any new scheme till the time the portfolio is rebalanced and will not levy exit load, if any, on the investors exiting such scheme(s).
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