No merit in relaxing 10% cap on single stock investment: Ajay Tyagi, chairman, Sebi


Published On: Wednesday, October 21, 2020 | By:

No merit in relaxing 10% cap on single stock investment: Ajay Tyagi, chairman, Sebi

SEBI sees no merit in increasing the 10 percent investment cap on a single stock for actively-managed mutual fund (MF) schemes. “The 10 percent cap is meant for diversification cap. Just because some scrip is outperforming doesn’t mean you raise the ceiling. That will be self re-enforcing that scrip has moved up and you are allowing higher investment in the same scrip. That doesn’t sound very logical. For the sake of diversification, the 10 percent ceiling is something which stays,” said Ajay Tyagi, chairman, Sebi while addressing the media at a market summit organised by industry body CII.

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