Passive breaches occur when deviations from mandated asset allocation, or prudential limits (like issuer, group, or sector limits), happen due to factors not attributable to the Asset Management Company’s (AMC) omission or commission. These factors can include corporate actions, significant price fluctuations of underlying securities, maturity of holdings, or large redemptions. SEBI has now explicitly stated that the provisions outlined in paragraph 2.9 of the ‘Master Circular for Mutual Funds’ which outlines a 30-business-day window for portfolio rebalancing, will apply to all types of such passive breaches.