SEBI issued new issuer limit for Mutual Funds schemes. What is the new limit for debt securities issued by AAA-rated companies?

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  1. 10% of the net asset value
  2. 12% of the net asset value
  3. 15% of the net asset value
  4. 18% of the net asset value
  5. 20% of the net asset value

Answer (Detailed Solution Below)

Option 1 : 10% of the net asset value
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The correct answer is 10% of the net asset value.

Key Points

  • The Securities and Exchange Board of India (SEBI) has issued new issuer limits for Mutual Funds schemes.
    • The new limits are based on the credit rating of the issuer.
    • For debt securities issued by AAA-rated companies, the new limit is 10% of the net asset value (NAV) of the scheme.
    • For AA-rated companies, the limit is 8%, and for A-rated companies, the limit is 6%.
    • For securities issued by companies with lower credit ratings, the limit is 4%.
    • The new limits are effective from July 19, 2023.
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