Sebi bars MFs from investing in pre-IPO placements

The Securities and Exchange Board of India has barred mutual fund schemes from participating in pre-IPO placements of equity shares and related instruments, allowing them to invest only in the anchor investor portion or the public issue of an IPO, according to a Moneycontrol report on Friday. In a letter to AMFI, SEBI cited Clause 1] of the Seventh Schedule of the Sebi (Mutual Funds) Regulations, 1996, which mandates that all investments by mutual fund schemes in equity shares and equity-related instruments must be made only in securities that are listed or to be listed.

- FPJ News Service

The regulator said the clarification was issued after receiving several queries on whether mutual funds could participate in pre-IPO placements before the opening of the anchor or public issue