Sebi to issue mutual fund light regulations for passive funds; seeks to ease compliance burden

India’s markets regulator, the Securities and Exchange Board of India (SEBI), is planning to reduce compliance requirements for passive investment funds, such as index funds and exchange-traded funds, through lightened mutual fund regulations. The move seeks to foster growth, lower costs and improve transparency for investors. SEBI has also revised the requirements for sponsoring a mutual fund, allowing private equity funds to become sponsors without a mandatory profit track record. Additionally, the regulator has implemented prudential regulations on open-ended mutual funds, especially debt funds, to enhance liquidity in the debt market and temper market risks.