SEBI mulls stress tests, swing pricing for MFs

Move to ensure liquidity in debt mutual funds, committee to work on measures, says Chairman Tyagi

The Securities and Exchange Board of India (SEBI) is contemplating policy measures such as stress-testing, minimum asset allocation in liquid assets, and a swing pricing like mechanism to address liquidity issues in debt mutual funds (MFs), said Chairman Ajay Tyagi.

Addressing the 25th AGM of AMFI on Tuesday, Mr. Tyagi said said one of the areas for improvement was to enhance the liquidity of the portfolio of open-ended debt MF schemes.

He said SEBI was facilitating the setting up of an expert committee to frame a stress testing methodology, encompassing liquidity, credit and market risks, for all open-ended debt oriented mutual fund schemes.

The committee would also design a framework to determine the minimum asset allocation required in liquid assets, taking into account the nature…

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