scorecardresearchNippon India Mutual Fund limits the subscription in small cap fund. Details

Nippon India Mutual Fund limits the subscription in small cap fund. Details here

Updated: 07 Jul 2023, 11:13 AM IST
TL;DR.

The fund house clarified that the step is warranted in view of the recent sharp rally in the small cap space and increased investor participation

These restrictions will not affect SIP or STP or such other special product registered prior to the effective date

These restrictions will not affect SIP or STP or such other special product registered prior to the effective date

Nippon India Mutual Fund has decided to limit the subscription of units in Nippon India Small Cap Fund with effect from Friday i.e., July 7.

The asset management company clarified that fresh subscriptions or switch-ins will not be permitted at any point of time until further notice.

The intimation was made via notice-cum-addendum release on July 6, 2023.

The fund house also stated that fresh registrations through Systematic Investment Plan (SIP) without initial investment or Systematic Transfer Plan (STP) or such other special product will continue subject to a limit of 5 lakhs per day.

Why is the limit imposed?

In the notice, the fund house clarified that the limit on subscription of units of the scheme is being proposed in view of the recent sharp rally in the small cap space and increased investor participation through high ticket investments.

The notice further highlights that the move would be in the best interest of existing unit holders and appropriate for incremental investments.

The imposed limit would facilitate gradual deployment of corpus in order to align with the nature of small cap investing, the notice stated.

These restrictions will not be applicable for investments mandated as per regulatory requirements i.e., alignment of interest of Designated Employees of AMCs with the Unitholders of the Mutual Fund Schemes and mandatory contribution by AMC in its schemes.

The aforesaid restriction will not affect SIP or STP or such other special product registered prior to the effective date and the unitholders under Dividend Reinvestment Option.

It is further highlighted that all the remaining features, terms and conditions will remain the same.

 

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First Published: 07 Jul 2023, 11:13 AM IST