SEBI Mutual Funds (Second Amendment) Regulations, 2025
The Securities and Exchange Board of India (SEBI) has issued the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2025, effective October 31, 2025, to modify the 1996 Mutual Funds Regulations. The key amendments integrate units of Real Estate Investment Trusts (REITs) into several provisions governing mutual fund investments. Specifically, the definition of “derivatives” in Regulation 2 is expanded to include REIT units. The maximum exposure limit for a liquid scheme’s investment in money market instruments and treasury bills is increased from 95 per cent to 97 per cent of the total assets. Furthermore, investment restrictions are detailed for both mutual funds under all schemes and Specialized Investment Funds (SIFs). Mutual fund schemes are now subject to investment limits on the units of REITs issued by a single issuer, mirroring the existing limits for paid-up capital of a company. The regulations simplify the language in multiple places by replacing “of any company” with “of any entity” and remove references to REITs in certain clauses related to InvITs in Regulations 49AA and Schedule VII. Finally, the clause related to investment limits in the debt securities of a single issuer in Regulation 52(6A) is omitted.
SECURITIES AND EXCHANGE BOARD OF INDIA
NOTIFICATION
Mumbai, the 31st October, 2025
SECURITIES AND EXCHANGE BOARD OF INDIA (MUTUAL FUNDS)
(SECOND AMENDMENT) REGULATIONS, 2025
F. No. SEBI/LAD-NRO/GN/2025/272.—In exercise of the powers conferred by section 30 read with clause (c) of sub-section (2) of section 11 of the Securities and Exchange Board of India Act, 1992 (15 of 1992), the Board hereby makes the following regulations to further amend the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, namely—
1. These Regulations may be called the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2025.
2. They shall come into force on the date of their publication in the Official Gazette.
3. In the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, –
I. In Chapter I, in regulation 2, in sub-regulation (1), in clause (ja), after the words “equity derivatives” and before the words “and such other instrument”, the words and symbols “, units of Real Estate Investment Trust” shall be inserted.
II. In Chapter VI, in regulation 49, in sub-regulation (3), the words and figures “95 per cent” shall be substituted with the words and figures “97 per cent”.
III. In Chapter VI-C, in regulation 49AA,
(i) in sub-regulation (2),
a. after the words “paid up capital carrying voting rights”, the words and symbol “or fifteen per cent of units of REITs issued by a single issuer, as the case may be” shall be inserted;
b. the Explanation shall be substituted with the following, namely –
“Explanation: If a mutual fund under all its schemes owns ten per cent of any company’s paid up capital carrying voting rights or ten per cent of units of REITs issued by a single issuer, as the case may be, then the Specialized Investment Fund under all its investment strategies shall not own more than five per cent of that company’s paid up capital carrying voting rights or five per cent of units of REITs issued by a single issuer respectively, as the case may be.
(ii) in sub-regulation (3), the words “of any company” shall be substituted with “of any entity”;
(iii) in sub-regulation (4),
a. after the words “may invest in the units of” and before the words and symbol “InvITs subject to the following:”, the words “REITs and” shall be omitted;
b. in clause (a), the words “REIT and” shall be omitted;
c. in clause (b), in sub-clause (i), the words “REITs and” shall be omitted;
d. in clause (b), in sub-clause (ii), the words “REIT and” shall be omitted;
e. in the proviso to clause (b), the words “REIT and” shall be omitted.
IV. In Chapter VII, in regulation 52, in sub-regulation (6A), clause (b) shall be omitted.
V. In schedule VII,
i. in Clause (2), after the words “paid up capital carrying voting rights”, the words and symbol “or ten per cent of units of REITs issued by a single issuer, as the case may be” shall be inserted;
ii. in Clause (10), the words “of any company” shall be substituted with “of any entity”;
iii. in Clause (13),
a) after the words “in the units of” and before the words and symbol “InvITs subject to the following:”, the words “REITs and” shall be omitted;
b) in sub-clause (a), the words “REIT and” shall be omitted;
c) in sub-clause (b), in item (i), the words “REIT and” shall be omitted;
d) in sub-clause (b), in item (ii), the words “REIT and” shall be omitted;
e) in proviso to sub-clause (b), the words “REIT and” shall be omitted.
AMIT PRADHAN, Executive Director
[ADVT.-III/4/Exty./436/2025-26]
Footnote:
1. The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, the Principal Regulations, were published in the Gazette of India on December 9, 1996 vide S.O. No. 856 (E).
2. The Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 were subsequently amended–
1. On April 15, 1997 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 1997 vide S.O. No.327 (E).
2. On January 12, 1998 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 1998 vide S.O. No.32 (E).
3. On December 8, 1999 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 1999 vide S.O. No.1223 (E).
4. On March 14, 2000 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2000 vide S.O. No.235 (E).
5. On March 28, 2000 by the Securities and Exchange Board of India (Appeal to the Securities Appellate Tribunal) (Amendment) Regulations, 2000 vide S.O. No.278 (E).
6. On May 22, 2000 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2000 vide S.O. No.484 (E).
7. On January 23, 2001 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2001 vide S.O. No.69 (E).
8. On May 29, 2001 by the Securities and Exchange Board of India (Investment Advice by Intermediaries) (Amendment) Regulations, 2001 vide S.O. No.476 (E).
9. On July 23, 2001 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2001 vide S.O. No.698 (E).
10. On February 20, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2002 vide S.O. No.219 (E).
11. On June 11, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2002 vide S.O. No.625 (E).
12. On July 30, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2002 vide S.O. No.809 (E).
13. On September 9, 2002 by the Securities and Exchange Board of India (Mutual Funds) (Fourth Amendment) Regulations, 2002 vide S.O. No.956 (E).
14. On September 27, 2002 by the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 vide S.O. No.1045 (E).
15. On May 29, 2003 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2003 vide S.O. No. 632 (E).
16. On January 12, 2004 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2004 vide F.No. SEBI/LAD/DOP/4/2004.
17. On March 10, 2004 by the Securities and Exchange Board of India (Criteria for Fit and Proper Person) Regulations, 2004 vide S.O. No. 398 (E).
18. On January 12, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2006 vide S.O. No. 38 (E).
19. On May 22, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2006 vide S.O. No. 783 (E).
20. On August 3, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2006 vide S.O. No. 1254 (E).
21. On December 27, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Fourth Amendment) Regulations, 2006 vide F. No. SEBI/LAD/DOP/82534/2006.
22. On December 27, 2006 by the Securities and Exchange Board of India (Mutual Funds) (Fifth Amendment) Regulations, 2006 vide F. No. SEBI/LAD/DOP/83065/2006.
23. On May 28, 2007 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2007 vide F. No. 11/LC/GN/2007/2518.
24. On October 31, 2007 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2007 vide F. No. 11/LC/GN/2007/4646.
25. On March 31, 2008 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2008 vide F. No. 11/LC/GN/2008/21669.
26. On April 16, 2008 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2008 vide F. No. LADNRO/ GN/2008/03/123042.
27. On May 22, 2008 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2008 vide No. LAD-NRO/GN/2008/09/126202.
28. On September 29, 2008 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2008 vide No. LAD-NRO/ GN/2008/24/139426.
29. April 8, 2009 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2009 vide No. LAD-NRO/GN/200910/01/159601.
30. On June 5, 2009 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2009 vide No. LAD- NRO/GN/2009-10/07/165404.
31. On July 29, 2010 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2010 vide No. LAD-NRO/GN/201011/13/13945.
32. On August 30, 2011 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2011 vide No. LAD-NRO/GN/201112/27668.
33. On February 21, 2012 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2012 vide No. LAD-NRO/GN/2011-12/38/4290.
34. On September 26, 2012 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2012 vide No. LAD-NRO/GN/2012-13/17/21502.
35. On April 16, 2013 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2013 vide No. LAD-NRO/GN/201314/03/5652.
36. On June 19, 2013 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2013-14/12/6108.
37. On August 19, 2013 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2013 vide No. LAD-NRO/GN/2013-14/18/6384.
38. On May 6, 2014 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/201415/01/1039.
39. On May 23, 2014 by the Securities and Exchange Board of India (Payment of Fees) (Amendment) Regulations, 2014 vide No. LAD-NRO/GN/201415/03/1089.
40. On December 30, 2014 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2014 vide No. LAD-NRO/GN/2014-15/19/1973.
41. On May 15, 2015 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2015 No. NROOIAE/GN/2015-16/005.
42. On February 12, 2016 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2016 vide No. SEBI/LADNRO/GN/2015-16/034.
43. On February 15, 2017 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2017 vide No. SEBI/LAD/NRO/GN/2016-17/031.
44. March 13, 2018 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2018 vide No. SEBI/LADNRO/GN/2018/02.
45. On May 30, 2018 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2018 vide No. SEBI/LADNRO/GN/2018/14.
46. On December 6, 2018 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2018 vide No. SEBI/LAD-NRO/GN/2018/50.
47. On December 13, 2018 by the Securities and Exchange Board of India (Mutual Funds) (Fourth Amendment) Regulations, 2018 vide No. SEBI/LAD-NRO/GN/2018/51.
48. On January 1, 2019 by the Securities and Exchange Board of India (Custodian of Securities) (Amendment) Regulations, 2018 vide No. SEBI/LAD-NRO/GN/2019/01.
49. On April 26, 2019 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2019 vide No. SEBI/LADNRO/GN/2019/011.
50. On September 23, 2019 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2019 vide No. SEBI/LAD-NRO/GN/2019/37.
51. On March 6, 2020 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2020 vide No. SEBI/LADNRO/GN/2020/07.
52. On April 17, 2020 by the Securities and Exchange Board of India (Regulatory Sandbox) (Amendment) Regulations, 2020 vide notification No. SEBI/LAD-NRO/GN/2020/10.
53. On October 29, 2020 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2020 vide No. SEBI/LAD-NRO/GN/2020/39.
54. On February 4, 2021 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2021 vide SEBI/LAD-NRO/GN/2021/08.
55. On August 3, 2021 by the (Regulatory Sandbox) (Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/30.
56. On August 5, 2021 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2021 vide No. SEBI/LADNRO/GN/2021/36.
57. On November 9, 2021 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2021 vide No. SEBI/LAD-NRO/GN/2021/56.
58. On January 25, 2022 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2022 vide SEBI/LAD-NRO/GN/2022/70.
59. On August 3, 2022 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/92.
60. On November 16, 2022 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2022 vide No. SEBI/LAD-NRO/GN/2022/106.
61. On February 7, 2023, by the Securities and Exchange Board of India (Payment of Fees and Mode of Payment) (Amendment) Regulations, 2023 vide notification No. SEBI/LAD-NRO/GN/2023/121.
62. On June 27, 2023 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2023 vide No. SEBI/LADNRO/GN/2023/134.
63. On July 3, 2023, by the Securities and Exchange Board of India (Alternative Dispute Resolution Mechanism) (Amendment) Regulations, 2023 vide notification No. SEBI/LAD–NRO/GN/2023/137.
64. On August 17, 2023, by the Securities and Exchange Board of India (Facilitation of Grievance Redressal Mechanism) (Amendment) Regulations, 2023 vide No. SEBI/LAD-NRO/GN/2023/146.
65. On July 2, 2024 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2024 vide No. SEBI/LADNRO/GN/2024/188.
66. On August 1, 2024 by the Securities and Exchange Board of India (Mutual Funds) (Second Amendment) Regulations, 2024 vide No. SEBI/LADNRO/GN/2024/197.
67. On December 16, 2024 by the Securities and Exchange Board of India (Mutual Funds) (Third Amendment) Regulations, 2024 vide No. SEBI/LADNRO/GN/2024/221.
68. On February 10, 2025, by the Securities and Exchange Board of India (Investor Charter) (Amendment) Regulations, 2025 vide Notification no. SEBI/LAD-NRO/GN/2025/228.
69. On February 17, 2025 by the Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2025 vide No. SEBI/LAD-NRO/GN/2025/230.
