The Securities and Exchange Board of India vide its notification dated 5th November 2020 has decided to enhance the foreign investment limit per mutual fund from 300 million USD to 600 million USD.
The Mutual Funds can make investments in overseas Exchange Traded Fund (ETF(s) subject to a maximum of US $200 million per Mutual Fund, within the overall industry limit of US $ 1 billion.
A mutual fund launching a new scheme intending to invest overseas will be required to specify the amount it will invest outside India and use the limit specified within 6 months.
Further for all ongoing schemes an investment headroom of 20% of the average AUM in Overseas securities of the previous three calendar months, would be available to the mutual fund for that month to invest.
The mutual fund shall report the utilisation of the foreign limit to Sebi on a monthly basis, within 10 days from the end of each month.
