SEBI has amended the Mutual Funds Regulations to permit intraday borrowing for timing mismatches, providing greater operational flexibility to fund managers, effective from September 2026.
New provisions for Intraday Borrowing
SEBI's latest amendment to the Mutual Funds Regulations, 2026 now permits mutual funds to engage in intraday borrowing specifically to address timing mismatches. This provision allows fund managers the flexibility to manage their portfolios more effectively.
This regulatory update is especially beneficial for fund houses as it enables them to optimize cash management strategies in line with market movements. The directive specifies that such borrowings must conform to conditions set forth by the Board.
Industries assisting mutual funds should consider these new regulations when advising clients on liquidity management and operational strategies, ensuring clients can take full advantage of this newly granted flexibility.
