Sebi is considering changes that would broaden how mutual funds can use intraday borrowing. Right now, such borrowing is mainly allowed to meet redemption payouts. Under the proposal, funds could use it more widely as a cash management tool to handle timing mismatches between outflows and receivables, potentially improving flexibility and returns.
SEBI has proposed new flexibility for mutual funds to use intraday borrowings for purposes beyond routine investor redemptions and payouts. However, it has deferred the implementation of the related guidelines to July 15, giving fund houses and stakeholders time to adjust to the updated framework as markets and compliance plans catch up.
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