The Securities and Exchange Board of India (SEBI) has enacted sweeping changes to mutual fund classification rules, compelling existing schemes to realign within six months. These reforms, effective February 26, 2026, aim to enhance transparency and investor clarity, affecting a broad spectrum of market participants.
According to SEBI circular No. SEBI/HO/IMD/DF3/CIR/P/2026/22, the children's and retirement mutual fund categories are discontinued. In their place, SEBI has introduced new categories, including 'contra funds' and 'sectoral debt funds.' This reclassification signifies a shift towards clearer investment thresholds and descriptions.
