Some debt funds have seen more than half their value wiped out over a short time, shocking investors, regulators and analysts alike. Sebi’s board has cleared several evidence-based and well-debated proposals that affect liquid funds in particular and debt funds in general. But Sebi found that liquid funds were being used by corporate clients of funds to churn their money overnight. Such safe and liquid securities provide mutual funds with assets to sell when faced with redemption. Too many had gone along with “mutual fund sahi hai" (is just right), only to find to their horror that this ad line was misleading.

Source: Mint June 30, 2019 15:22 UTC