The Securities and Exchange Board of India (SEBI) has not announced any new guidelines related to the introduction of five new categories under the ESG (environmental, social, and governance) scheme for mutual funds. Please note that regulations and guidelines in the financial industry can change frequently, and it’s possible that new developments have occurred after my last update.
However, based on the information you provided, it seems that the capital markets regulator, which is the Securities and Exchange Board of India (SEBI) in the case of India, has mandated mutual funds to establish a disclosure framework for the new categories introduced under the ESG (environmental, social, and governance) scheme.
A disclosure framework is a set of guidelines and regulations that require mutual funds to provide transparent and comprehensive information about the investments they make, especially related to environmental, social, and governance factors. This framework ensures that investors have access to relevant data about the ESG-related investments made by the mutual funds, helping them make informed decisions based on the fund’s approach towards sustainability and responsible investing.
- The five new categories for ESG schemes are: exclusions, integration, best-in-class and positive screening, impact investing, and sustainable objectives.
- Currently, mutual funds can only launch one ESG scheme under the thematic category of equity schemes.
- The new categories for ESG schemes will facilitate green financing with a focus on enhanced disclosures and mitigating greenwashing.
- The provision of the new category for ESG schemes is applicable with immediate effect.
- SEBI has mandated mutual funds to clearly disclose the name of the ESG strategy in the name of the concerned ESG fund.
These measures by SEBI aim to promote responsible investing and provide investors with more choices and transparency when it comes to investing in ESG-focused funds.
