SEBI Approves Mutual Funds as Alternative to Bank Deposits for Advisors
SEBI allows investment advisers and research analysts to use liquid and overnight mutual funds to meet deposit requirements, instead of only bank deposits. The decision, driven by industry feedback, aims for greater flexibility and compliance, effective from September, with BSE to implement necessary systems.
- Country:
- India
The Securities and Exchange Board of India (SEBI) has approved the use of liquid and overnight mutual funds by investment advisers and research analysts to fulfill their mandated deposit requirements, an alternative to traditional bank deposits.
Overnight mutual funds invest in short-term debt securities that mature in just one day. Previously, a deposit was required with a scheduled bank, designated for either the Investment Adviser Administration and Supervisory Body (IAASB) or the Research Analyst Administration and Supervisory Body (RAASB).
This decision, approved in SEBI's June 2025 meeting after industry consultations, mandates compliance by September 30. The Bombay Stock Exchange (BSE), acting as both IAASB and RAASB, must establish procedures and inform registered entities about the updated framework.
(With inputs from agencies.)
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