Home / Companies / News /  Nippon MF stops fresh investment in overseas funds one week after it was opened
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Nippon Life India Asset Management Ltd on Tuesday announced that it is stopping inflows into its international schemes one week after it opened such schemes for fresh investments.

The Securities and Exchange Board of India (Sebi) had last week allowed asset management companies (AMCs) to resume subscriptions in mutual fund schemes investing in overseas securities.

The approval was based on the condition that fund houses make investments in overseas funds /securities up to the headroom available without breaching the overseas investment limits at the mutual fund level.

Many fund houses, including Franklin Templeton and Mirae Asset Mutual Fund started accepting fresh inflows into their overseas funds, after suspending them for almost five months.

Mint had earlier reported that some fund houses such as Axis Mutual Fund and Motilal Oswal Mutual Fund did not see major redemptions in their overseas funds in the past few months and hence did not resume fresh investments in the schemes.

However, according to Nippon India MF, post the resumption of the subscription in certain of its schemes investing in overseas securities, there has been substantial utilization of available overseas investment limit.

“Therefore, with a view to avoid breach of the overseas investment limit as of EOD of 1 February 2022, we propose to suspend lumpsum subscription, switch-ins and fresh registration of SIP/STP or such other special products," Nippon India Mutual Fund said in a notice.

The schemes of the fund houses included US Equity Opportunities Fund, Japan Equity Fund, Taiwan Equity Fund, Multi Asset Fund and Nippon India ETF Hang Seng BeES.

The markets regulator in January had advised mutual funds investing in overseas securities to stop further investments in foreign stocks to avoid breach of industry-wide overseas limits.

Mutual funds can make overseas investments up to $1 billion per mutual fund, with the overall industry limit of $7 billion, according to a Sebi circular of 3 June 2021.

There’s a separate limit of $1 billion for investment in overseas exchange-traded funds.

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