Sebi chief cautions MFs over micro-cap stocks

First-Time Women Investors May Be Incentivised

- NESIL STANEY

SECURITIES AND EXCHANGE Board of India (Sebi) chairman Tuhin Kanta Pandey on Friday told mutual funds (MFs) to exercise caution while investing in micro-cap companies, a day after announcing plans of clipping short-tenure derivatives and a regulated platform for pre-IPO shares. Sebi is planning to introduce additional incentives for investments by first-time female investors, he said.

"While there is a need to diversify beyond bluechips, mutual funds as a retail product should exercise caution. Maintaining proper documentation for such investment decisions ensures transparency and sound due diligence. Beyond investment risks, we must also be mindful of operational risks that can undermine investor confidence," said Pandey at an event organised by the Association of Mutual Funds in India (Amfi).