Securities and Exchange Board of India (“SEBI”), vide circular no. SEBI/HO/IMD/DF3/CIR/P/2020/225 dated November 05, 2020 (“November Circular”) modified the overseas investment limits per mutual fund prescribed vide circular no. SEBI/IMD/CIR No.7/104753/08 dated September 26, 2007 and circular no. SEBI/IMD/CIR No.2/122577/08 dated April 08, 2008.
Based on the representations received from the mutual fund industry to enhance the investment limits, SEBI has further revised the overseas investment limits per mutual fund vide circular no. SEBI/HO/IMD/IMD-II/DOF3/P/CIR/2021/571 (“Circular”) on June 3, 2021.
The revised limits as per the Circular are extracted below:
1. Mutual funds can make overseas investments subject to a maximum of USD 1,000,000,000 (United States Dollar one billion) per mutual fund, within the overall industry limit of USD 7,000,000,000 (United States Dollar seven billion).
2. Mutual funds can make investments in overseas Exchange Traded Fund (ETF(s)) subject to a maximum of USD 300,000,000 (United States Dollar three hundred million) per mutual fund, within the overall industry limit of USD 1,000,000,000 (United States Dollar one billion).
3. In respect of investment limits to be disclosed in the scheme documents at the time of new fund offer as specified in Para 2.2 of the November Circular, and the investment limits on ongoing schemes as specified in Para 2.3 of the November Circular, the limits would henceforth be soft limits for the purpose of reporting only by mutual funds on monthly basis in the format prescribed under the November Circular.
Please find a copy of the Circular here and a copy of the November Circular here.
This update has been contributed by Anurag Prasad (Associate).
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