Indias markets regulator Sebi has overhauled mutual fund rules, allowing equity schemes to allocate more of their portfolios to gold and silver while tightening classification norms in the countrys rapidly expanding $900 billion fund industry.

Sebi said actively managed equity funds may, after meeting core allocation requirements, invest their residual portion, up to 35% of assets, in gold and silver instruments as well as units of infrastructure investment trusts. The move broadens the investment toolkit available to stock funds beyond money-market and liquid securities.