Prudential limits in sector exposure for Housing Finance Companies (HFCs)
Summary
SEBI increases the additional exposure limit for Housing Finance Companies (HFCs) within the financial services sector from 10% to 15%. This modification applies to debt-oriented mutual fund schemes and supports the Government’s Pradhan Mantri Awas Yojana. The circular mandates that HFC investments be rated AA or above and issued by NHB-registered entities.
Text
additional exposure limits provided for HFCs in financial services sector from 10% to 15%
total exposure of debt schemes of mutual funds in a particular sector ... shall not exceed 25% of the net assets of the scheme
additional exposure to financial services sector ... not exceeding 15% of the net assets of the scheme shall be allowed only by way of increase in exposure to Housing Finance Companies (HFCs)
additional exposure to such securities issued by HFCs are rated AA and above and these HFCs are registered with National Housing Bank (NHB)
total investment/ exposure in HFCs shall not exceed 25% of the net assets of the scheme
Appropriate disclosures shall be made in Scheme Information Document (SID) and Key Information Memorandum (KIM) of debt schemes
This circular shall be applicable with immediate effect
Source: SecMarx — Prudential limits in sector exposure for Housing Finance Companies (HFCs). Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.