Nippon India Mutual Fund has suspended subscriptions in four of its overseas schemes. The suspension applies to lumpsum subscriptions, switch-ins, and fresh registrations of Systematic Investment Plan (SIP)/Systematic Transfer Plan (STP) for specific overseas funds.
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The impacted schemes are:
The fund house emphasised that the suspension is temporary and will be subject to review based on factors such as the increase in available headroom without breaching overseas investment limits or regulatory enhancements.
The suspension does not apply to intra-scheme switches between plans and options within the same scheme, nor does it affect existing registered SIP/STP or other special product transactions, as per Nippon India Mutual Fund.
The mutual fund house further said that all other features, terms, and conditions of the affected schemes remain unchanged.
Background and regulatory context
The fund house referred to the Securities Exchange Board of India's (Sebi's) email dated January 28, 2022, and the Association of Mutual Funds in India's (AMFI's) communication dated January 30, 2022, which prompted the initial suspension of subscription activities from February 2, 2022.
Subsequently, Sebi's letter dated June 17, 2022, allowed the resumption of subscriptions within permissible limits.
Following the resumption on June 22, 2022, there was substantial utilisation of overseas investment limits, leading to another suspension from June 29, 2022.
The resumption of the subscription occurred again on August 4, 2022, in compliance with Sebi's directives.
Investor caution
Investors in the affected schemes of Nippon India Mutual Fund may feel concerned about the temporary suspension of subscription activities.
However, it must be noted that the temporary nature of the suspension suggests a potential for resumption in the future. Investors should closely monitor updates from the fund house and regulatory authorities.
Investors should assess their individual investment goals, risk tolerance, and portfolio diversification. If the temporary suspension aligns with an investor's long-term strategy, maintaining the current investment stance may be prudent.
However, those seeking to reallocate or make changes to their portfolio during this period of uncertainty should consider consulting with financial advisors to make well-informed decisions in line with their financial objectives.
(Edited by : Amrita)
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