Stock Market With Anil Singhvi: Market Guru decodes full impact of SEBI decision for investors

After the Securities and Exchange Board of India (SEBI) issued its recent circular on Mutual Funds, what options do the AMCs have? Will they be required to implement these rules in four months? Zee Business Managing Editor Anil SInghvi clears the air around these issues. See here!

Mutual Funds will not rush to buy shares and will take their time. The Managing Editor also said that the Mutual Funds will buy shares only when they like them

After the Securities and Exchange Board of India (SEBI) issued its recent circular on Mutual Funds, what options do the AMCs have? Will they be required to implement these rules in four months? Zee Business Managing Editor Anil SInghvi clears the air around these issues. See here!

The Market Guru begins by congratulating the regulator and said that it is unprecedented for SEBI to issue a circular on Sunday. A lot of things are clear now, he said. Mutual Funds now have a lot of options. It is not the case that the MFs have to buy shares by applying circuit by today itself. In fact, MFs are not likely to invest today. Buying could be from HNI investors or operators and retail investors, the Market Guru said.

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The Mutual Funds may stop fresh subscription in multi cap funds; they can ask investors to pull out their money from multi cap funds; they can ask investors to switch to other schemes; they can also merge the existing multi cap schemes into large cap schemes.

Mutual Funds will not rush to buy shares and will take their time. The Managing Editor also said that the Mutual Funds will buy shares only when they like them. It will happen irrespective of the SEBI regulation, Singhvi added.

For multi-cap schemes, the market regulator has mandated a 25 per cent minimum threshold to invest in each of large, mid and small caps. Prior to this change, there was no such requirement apart from having at least 65 per cent investment in equities. The funds have time till February to change the allocations.

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He said that even the Mutual Funds have four months' time to buy shares. He further said that all things are dependent upon the valuations and one should not create euphoria around it.

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