Capital markets regulator Sebi has asked mutual fund houses to put in place a framework to safeguard investors, who invested in smallcap and midcap schemes, amid a "froth building up" in these categories. Also, the regulator has suggested steps such as restrictions on inflows in these segments, portfolio rebalancing, and laying guidelines to safeguard investors from the first-mover advantage of redeeming investors. This came in the backdrop of strong flow in the small and midcap schemes of mutual funds over the last few quarters. In a communication to Association of Mutual Funds in India (AMFI) on Tuesday, Sebi asked the industry body to inform trustees of all the mutual fund houses to frame a policy to protect the interest of investors of smallcap and midcap schemes. "In the context of the froth building up in the small and mid-cap segments of the market and the continuing flows in the small and mid-cap schemes of mutual funds, trustees, in consultation with unitholder protection