SEBI Introduces Rules to Limit Portfolio Overlaps in Mutual Funds and Enhance Transparency

The Securities and Exchange Board of India (SEBI) has introduced measures to limit portfolio overlaps among thematic and sectoral mutual funds, requiring schemes with over 50% overlap to adjust their holdings within three years. An Elara Securities report identified 51 schemes breaching this threshold, with significant reallocations estimated at Rs 76,000 crore. SEBI also mandates monthly public disclosure of category-wise portfolio overlaps by asset management companies to enhance transparency and protect investors from concentrated risks.