The Securities and Exchange Board of India on 25th June 2021 has notified the Prudential norms for liquidity risk management for open ended debt schemes which shall come into force from 1st December 2021 and it shall be applicable for all the existing open ended debt schemes (except Overnight Fund, Gilt Fund and Gilt Fund with 10-year constant duration) and schemes to be launched on or thereafter.
All regulatory limit calculations other than Asset Allocation Limits (e.g. for Macaulay Duration, Risk-o-meter, investment restrictions pertaining to issuer, sector and group), the base to be considered is 100% of Net Assets.
Further, for asset allocation limits (applicable for Banking and PSU Bond Fund, Floater Fund, Credit Risk Fund and Corporate Bond Funds scheme categories in terms of SEBI circular on ‘Categorization and Rationalization of Mutual Fund Schemes’) the base shall be considered as Net assets excluding the extent of minimum stipulated liquid assets i.e. 10%.
