But Shah and other managers said several options were being explored, including merging such schemes with large-cap funds or asking unitholders to shift to other plans.
One Indian fund manager said the industry was planning to seek more time from SEBI to comply with the new rules, while also requesting a complete re-think.
“There is a lot of chaos and noise in the market … We are not doing anything. Investors also should not do anything in a hurry,” he said, declining to be identified.
SEBI on Sunday said it was conscious of the need to maintain market stability and will examine any proposals made by the mutual fund industry.
Reporting by Abhirup Roy; Editing by Aditya Kalra and Emelia Sithole-Matarise