SEBI Consultation Paper on Categorization of Mutual Fund Schemes

On 16th July 2025, in order to enhance transparency and streamline offerings, the Securities and Exchange Board of India (SEBI) proposed a comprehensive review of the categorisation and rationalisation of mutual fund (MF) schemes.

Objective of the Proposal

  • Improve clarity for investors regarding scheme offerings
  • Facilitate the introduction of new mutual fund schemes
  • Address the growing concern of portfolio overlap among similar schemes

Why this change?

  • Rapid Growth of the Mutual Fund Industry: The increase in AUM and the number of retail investors has outpaced the existing classification structure.
  • Product Overlap: SEBI noted that some schemes across different categories were holding strikingly similar ....
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