The Securities and Exchange Board of India (SEBI) issued an addendum to its earlier circular on borrowing by mutual funds, deferring the implementation of guidelines relating to intraday borrowings. The revised circular postpones the applicability of these provisions, originally introduced in March 2026, to July 15, 2026, in response to operational challenges raised by Asset Management Companies (AMCs). The guidelines, forming part of the SEBI Master Circular for Mutual Funds, aim to regulate borrowing practices and ensure prudent liquidity management. By granting additional time, SEBI intends to facilitate smoother implementation and allow stakeholders to align systems and processes with regulatory requirements. The decision reflects a balanced regulatory approach that considers industry concerns while maintaining investor protection and market stability under the SEBI (Mutual Funds) Regulations, 1996.
Securities and Exchange Board of India
Circular No. HO/(92)2026-IMD-POD-2/I/7885/2026 Dated: March 25, 2026
All Mutual Funds/
All Asset Management Companies (AMCs)/
All Trustee Companies/ Board of Trustees of Mutual Funds/
Association of Mutual Funds in India (AMFI)/
Sir / Madam,
Subject: Addendum to SEBI Circular on Borrowing by Mutual Funds
1. SEBI vide Circular No. HO/(92)2026-IMD-POD-2/I/6961/2026 dated March 13, 2026 (hereafter referred as “the circular”) prescribed certain guidelines on borrowing by Mutual Funds and incorporated at clause 5.9 of SEBI Master Circular for Mutual Funds dated March 20, 2026 (hereafter referred as “master circular”).
2. In clause 4 of the circular (clause 5.9.1 of the master circular), guidelines were specified for intraday borrowings by mutual funds.
3. In order to address the operational challenges raised by asset management companies with respect to intraday borrowings by mutual funds, it has been decided that the applicability of guidelines related to the intraday borrowings in the circular, i.e., clause 5.9.1 of the master circular shall now come into effect from July 15, 2026.
4. This circular is issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992, read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996, to protect the interest of investors in securities and to promote the development of, and to regulate the securities market.
5. This Circular is available at www.sebi.gov.in under the link “Legal > Circulars”.
Yours sincerely,
Priyanka Mahapatra
General Manager
Investment Management Department
Email: priyankam@sebi.gov.in
