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BankingNABARD / RBI

SEBI 50% Overlap Cap for Thematic and Sectoral Funds

3 March 20261 min read
BANKING & FINANCESEBI 50% OverlapCap for Thematicand SectoralFunds3 March 2026safalsetu.com

Why in the news

SEBI capped overlap inside each fund house for thematic and sectoral funds. Elara Securities expects restructuring across several schemes.

Key facts

  • 50% overlap cap applies within one AMC.
  • 51 schemes breach it; 13 go beyond 52%.
  • Rebalancing happens over a three-year glide path.

Why SEBI acted

  1. Cut product duplication and investor confusion.
  2. Preserve diversification and limit sector concentration risk.
  3. Support transparency and SEBI’s wider category streamlining.

Exam angle

  • Regulator: SEBI; cap: 50%.
  • Analysis cited: Elara Securities.

Test yourself

1. What is the maximum portfolio overlap SEBI allows among thematic and sectoral schemes of the same fund house?

The rule sets a 50% cap on common holdings.

2. How long is the glide path given to schemes that must rebalance under SEBI's overlap rule?

Schemes may rebalance over a three-year glide path.

3. According to the Elara Securities analysis of SEBI's overlap rule, how many schemes currently breach the 50% limit?

The analysis counted 51 schemes above the limit.

This topic is part of Daily Current Affairs 3 March 2026 (21 topics).

All topics of the dayDay quizMarch 2026

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