India, Sept. 4 -- Markets regulator SEBI on Thursday proposed permitting net settlement of funds for transactions undertaken by mutual fund schemes in the cash market, while continuing settlement of securities on a gross basis, aiming to reduce temporary liquidity requirements.

"The proposal is intended to facilitate ease of doing business, improve settlement efficiency and reduce temporary liquidity requirements for mutual fund schemes, while ensuring that existing safeguards relating to delivery-based settlement, scheme-wise accounting, valuation and investor protection remain unaffected," SEBI said in its consultation paper.

The proposal comes after SEBI received representations from market participants highlighting that mutual fund ...