Investors in liquid and liquid-plus (ultra-short term) mutual funds may soon find it unattractive to park their surplus fund in these schemes. Capital markets regulator, Securities and Exchange Board of India (Sebi), is planning to tighten the valuation norms. That should make these more volatile. To begin with, the regulator is planning to impose mark-to-market (MTM) requirements for instruments with a residual maturity period of 60 days and more. Sebi, eventually, wants all instruments irrespective of their tenure and type to be quoted on market rates and the net asset value (NAV) calculated accordingly, say people familiar with the developments. The move was earlier discussed by the mutual fund advisory committee.
Source: Business Standard
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