SEBI Revamps Mutual Fund Rules, Introduces Life Cycle Funds and Tightens Overlap Norms

The Securities and Exchange Board of India (SEBI) has overhauled mutual fund categorisation rules, introducing new categories like Life Cycle Funds, contra funds, and sectoral debt funds while discontinuing solution-oriented schemes such as children's and retirement funds. Life Cycle Funds feature a glide path strategy with tenures from 5 to 30 years, automatically adjusting asset allocation over time. SEBI also tightened portfolio overlap limits, mandated uniform scheme naming, and expanded equity and hybrid funds' ability to invest in gold and silver. Existing schemes must align with the new framework within six months, with phased compliance for overlap norms.