In January, SEBI had asked mutual fund houses to stop taking new subscriptions to schemes investing in foreign stocks.
In January, SEBI had asked mutual fund houses to stop taking new subscriptions to schemes investing in foreign stocks.
Capital markets regulator Securities and Exchange Board of India (SEBI) has allowed mutual funds to re-invest in foreign stocks within an aggregate mandated limit of $7 billion for the industry. This comes in the wake of a major correction in global markets, which has brought down valuations of international stocks.
In January, SEBI had asked mutual fund houses to stop taking new subscriptions to schemes investing in foreign stocks. The direction to stop subscriptions was mainly due to the mutual fund industry exceeding the mandated $7 billion limit for foreign investment.
The recent slowdown in global stocks reduced the cumulative value of investments made by all mutual fund houses together.
“Mutual fund schemes may resume subscription and invest in foreign funds/securities without violating the foreign investment limit at the mutual fund level on February 1, 2022,” SEBI said in a statement. The communication was sent to the Association of Mutual Funds in India on Friday.
Also, the regulator has asked AMFIs to ensure that the aggregate utilization of the foreign limit by each AMC or mutual fund remains capped at February levels. The regulatory nod came after AMFI requested SEBI to review investments in foreign securities by mutual funds.
Meanwhile, Edelweiss Mutual Fund announced that it will accept inflows into its international schemes from Tuesday. The schemes are – ASEAN Equity Off-Shore Fund, Greater China Equity Off-Shore Fund, US Technology Equity Fund of Fund, Emerging Markets Opportunities Equity Offshore Fund, Europe Dynamic Equity Offshore Fund, US Value Equity Off-Shore Fund and MSCI India Domestic and World Healthcare 45 Index Fund.
Following the SEBI directive, several fund houses including PPFAS Mutual Fund, DSP Mutual Fund and Edelweiss Mutual Fund had stopped accepting inflows into some of their schemes with international mandate.
SEBI has set an industry level aggregate limit of $7 billion for mutual funds to invest in foreign securities and funds and a separate limit of $1 billion for investment in foreign ETFs.