Context

The Securities and Exchange Board of India (SEBI) is planning to bring new mutual fund regulations for passive funds. 

About Passive Fund:

• A passive fund is an investment vehiclethat tracks a market index, or a specific market segment, to determine what to invest in.
• Unlike with an active fund, the fund manager does not decide what securities the fund takes on.
• This normally makes passive funds cheaperto invest in than active funds, which require the fund manager to spend time researching and analysing opportunities to invest in.
• Common type of passive funds are:
  • Index Funds
  • ETFs or Exchange-Traded Funds 
  • Fund of Funds