SEBI said to ease arbitrage fund rules to aid closing auctions

SEBI, India's securities regulator, is reportedly planning to relax rules for arbitrage mutual funds to help them participate in closing auctions. This move aims to improve liquidity in the stock market by allowing arbitrage funds to hold temporary unhedged positions. The easing of rules could benefit the market by attracting more arbitrage funds, which currently hold combined assets of Rs 3 trillion. This increased participation could lead to improved market efficiency and stability.

Why it matters

SEBI's rule change aims to improve liquidity in the Indian stock market by allowing arbitrage mutual funds to carry unhedged positions. This could lead to increased trading activity and market efficiency.

Market impact

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