The Security and Exchange Board of India (SEBI) on 20 March 2015 notified the SEBI (Mutual Funds) Regulations, 2015.
The notified regulations dropped the 20-25 rule requiring a minimum of 20 investors and a cap of 25 percent investment by an individual investor in a particular scheme, for certain foreign entities.
The rule will not be applicable to funds managed by local fund managers in regard to Category I and/or Category II FPIs (Foreign Portfolio Investors).
Category I FPIs includes government and government related entities and Category II FPIs includes both broad based entities such as mutual funds, investments trusts and persons such as portfolio managers, investment managers, asset management companies, banks among others.
The relaxation of the rule aimed at making easier for domestic mutual funds to manage offshore pooled assets.
Earlier, the funds not adhering to the 20-25 rule were bound to appoint a separate fund manager to manage the funds.