AMFI nods to MFIs to resume underwriting foreign funds

The Association of Mutual Funds in India (AMFI) clarified on Tuesday that AMCs (asset management companies) can resume subscriptions and make investments in foreign funds and securities up to the available margin without infringing the overseas investment limit used by individual mutual funds and AMCs as of February 1, 2022.

Assets under management of international funds, according to Value Research, stood at Rs 38,999 crore at the end of May 2022. This compares to Rs 45,655 crore at the end of December 2021. The ceiling for foreign investment in international securities is Rs 7 billion. dollars. .

AMFI said the total use of overseas investment limits by each AMC or mutual fund will remain capped at the amount as of February 1, 2022 to ensure compliance with the Sebi Directive. “Thus, AMCs can use the margin available in the overseas investment limit created due to redemptions and subsequent sale of overseas securities after February 1, 2022,” AMFI said in a statement. communicated.

In a June 17 letter to AMFI, Sebi said MFs could resume subscriptions and invest in foreign funds and securities. “AMFI is also required to ensure that the total use of the overseas investment limit by each AMC and MF remains capped at the amount as of February 1, 2022,” the capital markets regulator observed in the letter.

Many funds have little or no wiggle room.

Edelweiss Asset Management has decided to revoke the temporary suspension of seven of its international offerings with effect from June 21, 2022. ICICI Prudential Trust (the Trustee) has approved the resumption of subscriptions in five of its programs with effect from June 22, 2022. However, Motilal Oswal MF, in its note to investors on Tuesday, said it had not had any major redemptions in the past few months since the restrictions were imposed, leaving no additional room to accept new investments in one of its international funds.

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