Sebi feels current limit is quite high after it found a few funds are holding lower-rated papers in a big way; seeks information from some fund houses on their exposure to certain specific sectors and papers which got downgraded The Securities and Exchange Board of India is planning to tighten rules on mutual funds' investments in corporate debt paper in the wake of concern over excessive credit risk in certain fixed income portfolios. The market regulator is looking to lower mutual funds' investment limit for an individual company's debt security. At present, a mutual fund scheme is not allowed to invest more than 15% of its net asset value in debt instruments issued by a single issuer which are rated not below investment grade by a credit rating agency. This limit however can be raised to 20% with prior approval of the trustees. Now, the regulator feels this limit is quite high after it found that a few mutual funds were holding lowly-rated papers in a big way. “S