The Securities and Exchange Board of India, or SEBI, imposed tougher rules for cross-holdings in mutual funds and credit rating agencies.

The regulator said Dec. 28 that a sponsor or a shareholder of a mutual fund cannot directly or indirectly hold more than 10% stake in any other asset management company or trustee company of any other mutual fund. Similarly, a rating agency cannot hold 10% or more in any other rating agency.

The regulator said it exempted pension funds, mutual funds and insurance schemes from the cross-holding threshold.

In addition, under the new rules, rating agencies and mutual funds cannot have representation on the boards of their respective rivals.

Meanwhile, the regulator raised the minimum net worth requirement of rating agencies to 250 million rupees from 50 million rupees.

As of Dec. 28, US$1 was equivalent to 64.06 Indian rupees.