Mumbai, July 22 -- In a consultation paper released last week, the domestic market regulator SEBI has proposed to review the categorisation of mutual fund schemes in order to improve clarity, introduce new schemes and to address the issue of overlap in portfolios of schemes.

The paper proposes changes to the scheme categorisation process and the financial instruments into which each fund would be allowed to invest in. It also wants to examine whether fund houses should be allowed to launch solution-oriented schemes.

On the lines of sectoral equity funds, SEBI's proposal also suggests allowing fund houses to launch sectoral debt funds.

If the new proposals are accepted, most mutual fund schemes will be able to invest a portion of their ...