Sebi is mulling urgent steps to safeguard investors’ interest against any over-exposure of mutual funds to riskier corporate bonds.

The regulator is considering reducing the sector exposure limits for debt schemes to address concerns over the risks associated with their investments in distressed corporate bonds, which recently came to fore after Amtek Auto crisis. Currently, the exposure limit is 30 per cent.

Sebi’s board is likely to deliberate upon this proposals in its meeting scheduled for Monday, sources said.

The Securities and Exchange Board of India (Sebi) is also looking into additional guidelines for credit rating agencies with respect to rating procedures on such corporate bonds.

The issue of reducing the MF exposure limit for debt schemes caught Sebi’s attention after JP Morgan Mutual Fund got into troubles due to its exposure to debt securities of Amtek Auto, while a few other fund houses have also faced similar problems with regard to corporate bonds of a few other firms.