MFs can invest up to $600mn abroad

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The Securities and Exchange Board of India has enhanced the overseas investment limits per fund house to $600 million from the existing $300 million.

The overall mutual fund industry limit is $7 billion.

The regulator said mutual funds can make investments in foreign exchange traded funds of $200 million per fund house, within an overall industry limit of $1 billion. Earlier, the investment limit was $50 million per fund house.

Sebi said mutual funds launching new schemes intending to invest in foreign securities or ETFs should ensure that the scheme documents disclose the intended amount they plan to invest.

The limits disclosed in scheme documents would be valid for a period of six months from the date of closure of new fund offerings.

“Thereafter, the unutilised limit, if any, shall not be available to the mutual fund for investment in Overseas securities / Overseas ETFs and shall be available towards the unutilised industry wide limits,” Sebi said on Thursday.

The regulator said for all ongoing schemes that invest or are allowed to invest in foreign securities or ETFs, an investment headroom of 20% of the average assets under management AUM of the previous three calendar months would be available to the mutual fund for that month to invest.

Fund houses have to report the utilisation of overseas investment limits on a monthly basis, Sebi said.

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