SEBI Clarifies Rebalancing Timelines for Mutual Funds in All Passive Breach Cases

SEBI has clarified rebalancing timelines for mutual funds in 'all passive breach' cases. This clarification provides much-needed guidance to Asset Management Companies (AMCs) on how to manage their portfolios when passive investment strategies (like index funds or ETFs) deviate from their underlying indices due to market movements. The updated guidelines aim to ensure that mutual funds can rebalance their portfolios efficiently to accurately track their benchmarks, while also maintaining market stability and investor protection. This move enhances transparency and operational clarity for AMCs, allowing for smoother management of passive investment products in volatile market conditions.