SEBI plans overhaul of mutual funds 'risk-o-meter'

© Jocelyn Fernandes
SEBI plans overhaul of mutual funds ‘risk-o-meter’

The Securities and Exchange Board of India (SEBI) is planning another set of reforms, where it might revamp the mutual fund (MF) risk-o-meter.

The market regulator will expand the MF risk-o-meter to include a “Very High” risk category, CNBC-TV18 reported.

The five existing categories of MFs are – low, moderately low, moderate, moderately high and high.

Equity funds will be reclassified into the high and high risk categories, the news channel reported. All credit risk funds will be moved to the new very high risk category.

The report said credit risk funds will be judged on the basis of quality, duration, and liquidity of bonds.

The new risk classification will be scheme-specific, and not category specific.

(This is a developing story. Please check back for updates.)