SEBI permits mutual funds to utilize intraday loans for payouts and redemptions
Starting September 1, SEBI has expanded the scope for mutual funds to utilize intraday borrowing to improve the management of short-term cash requirements. This initiative is designed to assist asset management companies in addressing brief liquidity shortages while ensuring investor interests remain protected. According to the updated guidelines, mutual funds are permitted to leverage these borrowings for meeting redemption requests, dividend payouts, investment activities, and various settlement obligations, provided they adhere to established regulatory caps.
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