SEBI Tightens Timelines for Rebalancing Mutual Fund Portfolios

On 26th June 2025, the Securities and Exchange Board of India (SEBI) issued a new circular to bolster investor protection and maintain the integrity of mutual fund investments.

  • This circular clarifies and reinforces the regulatory expectations regarding how and when mutual fund portfolios must be rebalanced in the event of passive breaches of asset allocation or regulatory limits.

Key Points

  • SEBI expanded the applicability of Clause 2.9 of the ‘Master Circular for Mutual Funds’ (27-6-2024), and redefined the rules for rebalancing mutual fund portfolios, which were earlier meant only for asset allocation breaches, now applying to all types of passive breaches.
  • Originally, ....
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