SEBI Permits Indian Mutual Fund to Invest in Overseas Funds with Exposure to Indian Securities. Banking & Finance | Dated: 08 Nov 2024 On 4th November 2024, the Securities and Exchange Board of India (SEBI) permitted Indian Mutual Funds (MFs) to invest in overseas Mutual Funds (MFs) or Unit Trusts (UTs) that allocate a specific portion of their assets to Indian securities. 🎯 Key Highlights: - The total exposure to Indian securities by these overseas MF/UTs must not exceed 25% of their net assets. - The initiative aims to simplify investment in overseas MF/UTs, enhance investment transparency, and help MFs diversify their global investment portfolios. - This direction was introduced by SEBI via a circular issued under Section 11(1) of the SEBI Act, 1992, and Regulations 43(1) and 77 of the SEBI (Mutual Funds) Regulations, 1996. 💡 Other Important Facts: (i) SEBI mandates that all investor contributions to overseas MFs/UTs be combined into a single investment vehicle, with no separate side vehicles. (ii) Overseas MFs must operate as a "blind pool," ensuring that all investors have equal and proportionate rights in the fund without separate portfolios. (iii) If the exposure to Indian securities exceeds the 25% limit, an observance period of six months will be given from the date the breach is publicly disclosed. During this period, Indian MFs are prohibited from making new investments in the overseas MF/UT. Investments may resume once the exposure falls below the 25% limit. 📚 Test Your Knowledge: Which regulatory body recently permitted Indian mutual funds to invest in overseas funds with exposure to Indian securities? Correct Answer: SEBI 🚀 Quick Recap: About SEBI Chairperson: Madhabi Puri Buch Headquarter : Mumbai