SEBI warns mutual fund industry about rising risks in small and midcap funds

AMFI, the industry body for mutual funds was ordered by SEBI to send a directive to all the mutual funds about the growing risks in the valuations of small and mid-cap schemes and asked them to moderate the flows, and make more disclosures.

Slightly weird directive but who knows this might be good news in the short run to cool things down in micro to midcap space

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I think in the coming months, SEBI will advise mutual fund houses to close “Bulk investment” or limit bulk investment to a certain amount per month or only accept investment via SIPs mode.

I see this move coming in a short time!