Multiple choice

Which of the following SEBI restrictions applies to a scheme's investment in unlisted shares?

  1. A close ended scheme may invest a maximum of 10% of its NAV in unlisted shares

  2. An open-end scheme may invest a maximum of 5% of its NAV in unlisted shares

  3. Both (1) and (2)

  4. None of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

SEBI regulations restrict investments in unlisted shares to limit liquidity and valuation risks. Close-ended schemes may invest up to 10% of their NAV in unlisted shares, while open-ended schemes face a stricter 5% limit. These different limits reflect the redemption pressure that open-ended funds face versus the locked-in capital of close-ended schemes.

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