Sebi said mutual funds often face intraday timing mismatches between redemption payouts and inflows from investments. Typically, redemption payments to investors are processed during the morning hours of the settlement day (T+1), while funds from instruments such as TREPS and reverse repo transactions are received later in the evening.
To bridge this temporary funding gap, mutual fund schemes some...
**STEELMAN:** Sebi’s new rules provide a structured framework for mutual funds to manage liquidity gaps, reducing reliance on ad-hoc borrowing while protecting investors. By capping intraday borrowing to guaranteed receivables and mandating AMC accountability, the regulator balances operational flexibility with risk mitigation. The policy also acknowledges the unique needs of index funds and ETFs, ensuring market participation isn’t disrupted by timing issues.
**PATTERN SCAN:** The narrative lea...