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SEBI issued new regulation limiting mutual funds exposure to perpetual bonds
The Securities and Exchange Board of India (SEBI) issued a circular on the analysis of norms for investment in debt instruments with special features and perpetual bond valuation. Under the new law, no mutual fund can own more than 10 percent of the AT1 bonds issued by a single issuer, while the allocation to such securities would be less than 10 percent of the assets and less than 5 percent to a single issuer.
In addition, for the "purpose of valuation," the maturity of all perpetual bonds must be treated as 100 years from the date of issuance.
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