As the market regulator's recent change in norms regarding constitution of multi-cap funds continues to cause some discomfort among mutual funds, SEBI Chairman Ajay Tyagi on Tuesday said that the regulator is not forcing anyone to invest in mid or small cap companies, as it has only asked fund houses to keep their schemes "true to label".
On September 11, SEBI said that multi-cap funds will now invest minimum 75 per cent of total assets in equities with 25 per cent each in large cap, mid cap and small cap companies.
Describing the recent "confusion" regarding its circular on multi-cap funds as "unfortunate", Tyagi said: "What we are saying and what we are trying to address here is 'true to label'."
"So when we said that multi-cap should have some portion in small cap and mid cap, we are not really forcing anyone to invest in those caps, we are saying investment should be done in the best interest of the investors."
He added that if a fund is given a label, its form should be as per the name.
Tyagi, however, said that SEBI has received representation from the Association of Mutual Funds in India (AMFI) and it is "actively" examining them and it will look at how further clarification can be provided.
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