**Summary:**
This Securities and Exchange Board of India (SEBI) circular (SEBI/HO/IMD/IMD-I/DOF3/P/CIR/2021/571) dated June 03, 2021, revises the overseas investment limits for Mutual Funds (MFs). Responding to requests from the Mutual Fund industry, the circular enhances the investment limits per Mutual Fund within the existing overall industry limits.
Specifically, Mutual Funds can now make overseas investments up to a maximum of US$1 billion per Mutual Fund, subject to an overall industry limit of US$7 billion (2.1). Investments in overseas Exchange Traded Funds (ETFs) are capped at US$300 million per Mutual Fund, within an overall industry limit of US$1 billion (2.2). Investment limits disclosed in scheme documents at the time of New Fund Offer (NFO) and investment limits on ongoing schemes will be considered soft limits (2.3) and will be reported by Mutual Funds on a monthly basis in the format prescribed in the SEBI circular dated November 5, 2020. All other conditions specified in the November 5, 2020 circular remain unchanged (3).
This circular takes effect immediately (4) and is issued under the authority of Section 11(1) of the Securities and Exchange Board of India Act, 1992, and Regulation 77 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1996, to protect investor interests and promote the development and regulation of the securities market (5).
For further information, contact Bithin Mahanta, General Manager, at 022-26449634 or bithinm@sebi.gov.in.
Key Entities Referenced
Securities and Exchange Board of India: Regulatory body for securities market in India; issuer of the circular.
Mutual Funds (MFs): Entities regulated by the circular regarding overseas investment limits.
Asset Management Companies (AMCs): Companies managing mutual funds, subject to the circular's provisions.
Association of Mutual Funds in India (AMFI): Industry association for mutual funds in India.
Overseas Investment: The subject of the circular, pertaining to limits for mutual funds.
US 1 billion: Maximum overseas investment limit per Mutual Fund, within overall industry limit.
US 7 billion: Overall industry limit for overseas investments by Mutual Funds.
Securities and Exchange Board of India Act, 1992: The Act under which the circular is issued, granting powers to SEBI.
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Securities and Exchange Board of India
CIRCULAR
SEBI/HO/IMD/IMD-II/DOF3/P/CIR/2021/571 June 03, 2021
All Mutual Funds (MFs)/
Asset Management Companies (AMCs)/
Trustee Companies/ Board of Trustees of Mutual Funds/
Association of Mutual Funds in India (AMFI)
Sir / Madam,
Sub: Enhancement of Overseas Investment limits for Mutual Funds
1. The Para 1 of SEBI Circular No. SEBI/HO/IMD/DF3/CIR/P/2020/225 dated
November 05, 2020 specified the overseas investment limits per Mutual Fund.
2. In this regard, based on the representations received from Mutual Fund
industry to enhance the investment limits per Mutual Fund, the limits are being
revised as under:
2.1 Mutual Funds can make overseas investments subject to a maximum of
US $ 1 billion per Mutual Fund, within the overall industry limit of US $ 7
billion.
2.2 Mutual Funds can make investments in overseas Exchange Traded Fund
(ETF(s)) subject to a maximum of US $ 300 million per Mutual Fund,
within the overall industry limit of US $ 1 billion.
2.3 In respect of investment limits to be disclosed in the scheme documents
at the time of NFO as specified in Para 2.2 of the aforesaid circular, and
the investment limits on ongoing schemes as specified in Para 2.3 of the
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Securities and Exchange Board of India
aforesaid circular, such limits would henceforth be soft limits for the
purpose of reporting only by Mutual Funds on monthly basis in the format
prescribed vide SEBI circular dated November 5, 2020.
3. All other conditions specified in the above mentioned circular shall remain
unchanged.
4. This circular shall come into force with immediate effect.
5. This circular is issued in exercise of the powers conferred under Section 11 (1)
of the Securities and Exchange Board of India Act, 1992, read with Regulation
77 of the Securities and Exchange Board of India (Mutual Funds) Regulations,
1996 to protect the interests of investors in securities and to promote the
development of, and to regulate the securities market.
Yours faithfully,
Bithin Mahanta
General Manager
Tel no.: 022-26449634
Email: bithinm@sebi.gov.in
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