The market regulator Securities and Exchange Board of India (Sebi) has asked asset management companies (AMC)?s to bring down their investment in money market instrument to a 30% limit within in a period of three months from the date of notification.
In a notification issued on June 5, 2009, the market regulator has announced to lower the cap on investment by AMC?s in money market instruments to 30%, but did not gave the definite time period within which the fund houses have to comply with the new rule.
In a separate circular issued on Monday, Sebi said, ?It is hereby clarified that in case of the existing schemes where investments in money market instruments of an issuer are not in compliance with the said notification, AMCs shall ensure compliance within a period of three months from the date of notification?.
However, such limits would not be applicable for investments in government securities, treasury bills, collateralised borrowing and lending obligation. In order to protect the interest of investors in the securities market, Sebi took the move after finding several fund houses increasing their exposure significantly in the money market instrumentsputting investor?s money at risk.
