Circular No. SEBI/HO/IMD/DF4/CIR/P/2021/032, Dated 11.03.2021
The market regulator, SEBI has decided to put investment limits for mutual funds schemes with special features like Additional Tier 1 (AT1) and Additional Tier 2 (AT2) bonds. At present, there are no specified investment limits for these instruments with special features and these instruments may be riskier than other debt instruments. Therefore, the following prudential investment limits have been decided for such instruments.
I. No Mutual Fund under all its schemes shall own more than 10% of such instruments issued by a single issuer.
II. Mutual Fund scheme shall not invest
A. more than 10% of its NAV of the debt portfolio of the scheme in such instruments; and
B. More than 5% of its NAV of the debt portfolio of the scheme in such instruments issued by a single issuer.
The above investment limit for a mutual fund scheme shall be within the overall limit for debt instruments issued by a single issuer, as specified in SEBI (Mutual Fund) Regulations, 1996, and other prudential limits with respect to the debt instruments