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No proposal to Sebi for new index, will follow cap on stock norms: Amfi

The Association of Mutual Funds in India (Amfi), an trade physique, stated on Thursday that it has not despatched any proposal to the Securities and Exchange Board of India (Sebi) for launching a new benchmark index or putting a cap on any stock.

It added that the trade would proceed adhering to Sebi’s steering concerning capping of a single stock.

Referring to a report in a piece of the media about Amfi/asset administration corporations (AMCs) proposing to Sebi the launch of a new benchmark index, the trade physique in a press release clarified that it had not written to Sebi. Amfi stated that every time any mutual fund (MF) launches a scheme, the fund home chooses an acceptable benchmark index that displays the composition of the scheme’s portfolio.

It additionally stated that there have been, undoubtedly, challenges in efficiency measurement provided that indices don’t have a cap on shares, whereas MF schemes have a limitation of 10 per cent for a single stock.

“However, this issue needs to be settled between fund houses and index-calculating agencies. Globally, index-calculating agencies do prepare customised indices that comply with investment restrictions of the fund,” it added.

All the 44 AMCs which can be registered with Sebi, are the members of Amfi.

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