SEBI mandates mutual fund industry and AMFI to conduct independent stress tests for risk assessment.
SEBI, India's securities market regulator, has instructed the mutual fund industry and industry body AMFI to conduct independent stress tests as a precautionary measure against potential risks. Ananth Narayan Gopalakrishnan, a whole-time member at SEBI, stated that conducting stress tests during good times can help identify risks before they become problematic. The mutual fund industry has experienced rapid growth, with assets under management increasing from ₹23.8 lakh crore in March 2019 to ₹61.2 lakh crore in June 2024. SEBI aims to strengthen the mutual fund ecosystem by assessing and managing liquidity risks, particularly in small and mid-cap equity schemes, and improving risk measurement systems to better reflect differences in risks among various investment schemes.