Motilal Oswal MF to reopen two Nasdaq ETFs for large investors

Large investors deal in ‘creation unit size’ apart from authorized participants and market makers who create or redeem directly with the fund or AMC.

According to a note effective October 21, large investors will be able to subscribe or create units of these two ETFs directly with AMCs in ‘unit creation size’.

Notably, the direct creation of these two ETFs for authorized participants or market makers is already permitted with effect from 19 September 2022.

Liquidity in ETFs is created by market-makers called authorized participants, who are pre-appointed by AMCs to improve ETF liquidity.

For other schemes investing in foreign securities like Motilal Oswal S&P 500 Index Fund, Motilal Oswal Nasdaq 100 Fund of Fund and Motilal Oswal MSCI EAFE Top 100, the fund house continues with restrictions on subscription, purchase or systematic investment plans (SIPs) . Choose an index fund.

In February, the Securities and Exchange Board of India (SEBI) had advised mutual funds investing in foreign securities to avoid breaching industry-wide foreign limits to prevent further investment in foreign stocks.

The regulator has specified an industry-level overall limit of $7 billion for mutual funds to invest in foreign securities and funds, and a separate limit of $1 billion for investments in foreign ETFs.

Further, the Association of Mutual Funds in India (Amfi) notified in June that mutual fund schemes may resume subscription by February 1, 2022 without violating the foreign investment limit and invest in foreign funds/securities till the available headroom. can.

The fund house also highlighted that it was constantly engaging with the regulator to increase the foreign investment limit by mutual funds.