India’s capital markets regulator Securities and Exchange Board of India (SEBI) has updated the classification rules of mutual fund schemes on 26 February. The new rules will replace the old categorization rules of 6 October 2025 and 6 November 2025 and will be applicable to mutual funds, AMCs, trustee companies and AMFIs. Now mutual fund schemes will be in 5 broad groups: Equity, Debt, Hybrid, Life Cycle Funds and Other Schemes. The biggest change has come in Equity Funds, where the minimum allocation for each category has been fixed. Multi Cap Funds will now invest at least 75% in equity, comprising 25% large-cap, 25% mid-cap and 25% small-cap. Minimum 80% allocation in Large Cap Funds and 35%-35% in Large & Mid Cap Funds will be mandatory.