{"id":250110,"date":"2021-06-22T09:54:02","date_gmt":"2021-06-22T04:24:02","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=250110"},"modified":"2021-06-22T09:54:02","modified_gmt":"2021-06-22T04:24:02","slug":"sebi-issues-norms-for-investment-and-disclosure-by-mutual-funds-in-derivatives","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2021\/06\/22\/sebi-issues-norms-for-investment-and-disclosure-by-mutual-funds-in-derivatives\/","title":{"rendered":"SEBI issues norms for investment and disclosure by mutual funds in derivatives"},"content":{"rendered":"<p style=\"text-align: justify;\">On June 18, 2021, the Securities and Exchange Board of India (SEBI) has issued a circular for the norms for investment and disclosure by mutual funds in derivatives.<\/p>\n<p>&nbsp;<\/p>\n<p style=\"text-align: justify;\"><span id=\"page5R_mcid13\" class=\"markedContent\"><span dir=\"ltr\">SEBI <\/span><span dir=\"ltr\">vide <\/span><span dir=\"ltr\">Circular <\/span><span dir=\"ltr\">No.<\/span><span dir=\"ltr\">Cir\/IMD\/DF\/11\/<\/span><span dir=\"ltr\">2010 dated August 18, 2010 <\/span><span dir=\"ltr\">has<\/span><span dir=\"ltr\">, <\/span><span dir=\"ltr\">inter <\/span><span dir=\"ltr\">alia,<\/span><span dir=\"ltr\">prescribed the guidelines for participation of mutual fund schemes in <\/span><span dir=\"ltr\">Interest Rate Swaps (IRS). Paragraph 8 has been modified<\/span><span dir=\"ltr\"> of the aforesaid circular <\/span><span dir=\"ltr\">as follows:<\/span><\/span><\/p>\n<p>&nbsp;<\/p>\n<ul>\n<li style=\"text-align: justify;\">Mutual Funds may enter into plain vanilla Interest Rate Swaps (IRS) for hedging purposes. The value of the notional principal in such cases must not exceed the value of respective existing assets being hedged by the scheme.<\/li>\n<li style=\"text-align: justify;\">In case of participation in IRS is through over the counter transactions, the counter party has to be an entity recognized as a market maker by RBI and exposure to a single counterparty in such transactions should not exceed 10% of the net assets of the scheme. However, if mutual funds are transacting in IRS through an electronic trading platform offered by the Clearing Corporation of India Ltd. (CCIL) and CCIL is the central counterparty for such transactions guaranteeing settlement, the single counterparty limit of 10% shall not be applicable.\u201d<\/li>\n<\/ul>\n<p style=\"text-align: justify;\">\n","protected":false},"excerpt":{"rendered":"<p>On June 18, 2021, the Securities and Exchange Board of India (SEBI) has issued a circular for the norms for investment and <\/p>\n","protected":false},"author":8808,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[4,1193],"tags":[],"class_list":["post-250110","post","type-post","status-publish","format-standard","hentry","category-legislationupdates","category-notifications"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>SEBI issues norms for investment and 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