SEBI has amended the Mutual Funds Regulations, 2026, allowing mutual funds to engage in intraday borrowing to address timing mismatches, contingent upon adhering to conditions set by SEBI.
Intraday Borrowing Authorized for Mutual Funds
In a significant regulatory update, SEBI announced on July 3, 2026, that mutual funds will now be permitted to engage in intraday borrowing to address timing mismatches within their operations. This amendment to the Mutual Funds Regulations, 2026, is intended to provide greater operational flexibility for fund managers.
The new provisions include specific conditions that mutual funds must observe while utilizing this borrowing mechanism. SEBI's decision underscores its commitment to facilitating better liquidity management among mutual funds, allowing them to address cash flow needs more effectively.
Legal practitioners representing mutual funds should familiarize themselves with the specific conditions attached to this new borrowing permission to ensure that their clients remain compliant and can optimally utilize this new regulatory flexibility.
Citations
- SEBI Notification (2026) SEBI Official Gazette
