Mutual fund investment restrictions require dematerialised settlement, metal-ETF limits, and exchange-only derivatives and short-selling. Regulation 41 prescribes that mutual fund investments must follow the Sixth Schedule and Board-specified restrictions, require settlement in dematerialised securities unless exempted, confine gold and silver ETFs to metal-related instruments with limited liquidity holdings and short-term bank deposits pending deployment, prohibit carry forward transactions except as permitted, and allow derivatives, short-selling and inter-scheme transfers only on recognised exchanges and under Board frameworks and conditions.