Mutual Funds Press SEBI to Relax Regulation 24(b) for AMCs
Why in the news
Top fund houses have asked SEBI, during its ongoing review, to loosen limits on what asset management companies (AMCs) can do beyond core fund management, so they can grow at home and overseas.
About Regulation 24(b)
- Sits within Regulation 24, which lays down AMCs’ general duties, in the 1996 SEBI Mutual Fund Regulations.
- Sub-clause (b) restricts AMC business activities to protect investors and avoid conflicts of interest.
Demands versus SEBI’s proposals
| Industry asks | SEBI’s July 2025 consultation paper |
|---|---|
| Easier AMC mergers and acquisitions | Let AMCs run certain pooled funds that are not broad-based (family offices, offshore vehicles) with no separate PMS licence |
| Wealth management and custom portfolio management for HNIs | Let AMCs act as global distributors for funds run by themselves or subsidiaries, under strict oversight |
| Cross-distribution of other AMCs’ products | – |
| New value-added services and global fund advisory | – |
Key facts
- The industry’s requests go beyond SEBI’s proposals and seek an overhaul of the Mutual Fund Regulations.
- AMCs now handle SIFs (Specialised Investment Funds), AIFs (Alternative Investment Funds) and global advisory and distribution mandates, besides traditional schemes.
Exam angle
- Regulator: SEBI; entity: AMC.
- Rule under review: Regulation 24(b) of the 1996 fund rules.
- Abbreviations: PMS, HNI, SIF, AIF.