SEBI temporarily allows arbitrage funds 1% unhedged for closing auctions

Business Sep 16, 2026

SEBI just made a temporary rule change to help boost participation in stock market closing auctions.

Now, arbitrage mutual funds (those managing about ₹3 trillion at the end of August) can keep up to 1% of their portfolios unhedged (basically, a bit more flexibility than before).

This tweak is meant to fix the low turnout in these auctions since they kicked off on Aug. 3.

AMFI notifies, SEBI considers auction changes

AMFI has already let asset managers know about the update, so you might hear from your fund soon.

SEBI is also looking at bigger changes down the line to make the auction process smoother and keep prices steadier on expiry days.