New Delhi, March 23 (IANS) Sebi’s directive to mutual fund schemes with investments in ETFs listed on foreign exchanges comes as the Mutual Fund industry reaches close to the investment limit of $1 billion set by the regulator for this category, says Chirag Mehta, CIO, Quantum AMC.
This is reminiscent of the time when the industry had reached the $7 billion foreign investment limit and had to suspend flows in funds investing in stocks overseas. These limits probably were put in place to limit outflows of foreign currency within a limit to reduce the impact on balance of payments and thereby on the Indian currency, Mehta said.
“The result will be that these mutual fund schemes will have to limit their inflows. It’s been a long time since these limits were set and are probably due for enhancement,” he said.
The Association of Mutual Funds India (AMFI) received a directive from the Securities and Exchange Board of India (SEBI) instructing a cessation of new investments in ETFs allocating funds to overseas markets, as per Angel One. This action comes in response to the nearing breach of the upper limit for ETFs set by the Reserve Bank of India (RBI) for overseas investments, currently standing at $1 billion out of a total industry-wide limit of $7 billion.
Effective from April 1, 2024, fund of funds (FoFs) investing in exchange-traded funds (ETFs) listed on international markets will be required to halt the acceptance of new investments. This move follows the regulatory framework aimed at maintaining adherence to RBI’s prescribed limits on foreign investments by mutual funds, as per Angel One.
–IANS
biz/san/uk
Disclaimer
The information contained in this website is for general information purposes only. The information is provided by TodayIndia.news and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the website for any purpose. Any reliance you place on such information is therefore strictly at your own risk.
In no event will we be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising from loss of data or profits arising out of, or in connection with, the use of this website.
Through this website you are able to link to other websites which are not under the control of TodayIndia.news We have no control over the nature, content and availability of those sites. The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.
Every effort is made to keep the website up and running smoothly. However, TodayIndia.news takes no responsibility for, and will not be liable for, the website being temporarily unavailable due to technical issues beyond our control.
For any legal details or query please visit original source link given with news or click on Go to Source.
Our translation service aims to offer the most accurate translation possible and we rarely experience any issues with news post. However, as the translation is carried out by third part tool there is a possibility for error to cause the occasional inaccuracy. We therefore require you to accept this disclaimer before confirming any translation news with us.
If you are not willing to accept this disclaimer then we recommend reading news post in its original language.
