scorecardresearchSome mutual funds resume subscription to global funds after a gap of five months

Some mutual funds resume subscription to global funds after a gap of five months

Updated: 22 Jun 2022, 10:28 AM IST
TL;DR.
Capital market regulator SEBI had directed AMCs to stop accepting fresh inflows into overseas schemes after the $7-billion investment threshold was breached
AMFI clarified that AMCs can utilise the headroom available in the overseas investment limit created due to redemptions.

AMFI clarified that AMCs can utilise the headroom available in the overseas investment limit created due to redemptions.

A few fund houses offering schemes that invest in overseas stocks have started accepting fresh inflows from investors after a gap of nearly five months, reported Business Standard.

Edelweiss AMC on Monday said it has revoked the temporary suspension in seven of its international offerings with effect from June 21.

ICICI Prudential AMC, too, approved resuming subscriptions in five of its schemes with effect from June 22, wrote BS.

On January 31, markets regulator Securities and Exchange Board of India had directed AMCs to stop accepting fresh inflows into overseas schemes after the $7-billion industrywide investment threshold got breached. While the investment ceiling hasn’t been raised, the turmoil in the market seen this year has once again created investment legroom.

Industry body Association of Mutual Funds in India on Tuesday clarified that AMCs can utilise the headroom available in the overseas investment limit created due to redemptions and consequent sale of overseas securities after February 1.

It further said that the total utilisation of the overseas investment limit by each AMC shall remain capped at the amount as of February 1.

As a result, not all AMCs are able to reopen fresh subscriptions. Motilal Oswal AMC which had to stop investments in five of its international schemes in February, said, “We would like to inform that we have not had major redemptions in the past few months since these restrictions were applied, resulting in no additional room for accepting fresh investment in any of our international funds.”

The ban on fresh investments in overseas schemes has come as a blessing in disguise for investors. Most global markets, particularly the US, have dropped more than 20 per cent since January amid a hawkish pivot by central banks to curb inflationary pressures.

First Published: 22 Jun 2022, 10:28 AM IST