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mutual funds: Sebi doubles abroad funding limits for mutual funds

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The Securities and Exchange Board of India (Sebi) has enhanced the abroad funding limits per fund home to $600 million from the prevailing $300 million.

The general mutual fund business restrict is $7 billion.

The regulator stated mutual funds could make investments in international alternate traded funds (ETFs) of $200 million per fund home, inside an general business restrict of $1 billion. Earlier, the funding restrict was $50 million per fund home.

Sebi stated mutual funds launching new schemes desiring to put money into international securities or ETFs ought to make sure that the scheme paperwork disclose the supposed quantity they plan to speculate.

The limits disclosed in scheme paperwork could be legitimate for a interval of six months from the date of closure of recent fund choices.

“Thereafter, the unutilised limit, if any, shall not be available to the mutual fund for investment in Overseas securities / Overseas ETFs and shall be available towards the unutilised industry wide limits,” Sebi stated on Thursday.

The regulator stated for all ongoing schemes that make investments or are allowed to put money into international securities or ETFs, an funding headroom of 20% of the common belongings beneath administration AUM of the earlier three calendar months could be out there to the mutual fund for that month to speculate.

Fund homes need to report the utilisation of abroad funding limits on a month-to-month foundation, Sebi stated.

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