Sebi asks asset managers to set up monthly stress tests

The Securities and Exchange Board of India (Sebi) on Thursday asked asset managers to conduct monthly stress tests on their liquid and money market mutual funds in a bid to improve risk management across the sector.

The capital market regulator said the tests should be conducted for risks from interest rates, credit, as well as liquidity and redemption, according to a circular on its website.

The fund houses will need to assess the impact of these risk parameters on their funds' net asset value and put in place corrective policies in case a vulnerability is revealed, Sebi said.

(Reuters)