Canara Robeco Mutual Fund (MF) has stopped accepting investments from investors in the United Arab Emirates (UAE) after the Financial Action Task Force (FATF) added the UAE to the gray list. Top MF executives said their fund houses had become cautious about inflows from the Gulf nation, but had not stopped accepting investment from the United Arab Emirates. Most said they will wait a bit before making a final decision. Canara Robeco MF on its website said: “Under the FATF’s addition of the UAE to the gray list, it has been decided to temporarily refrain from accepting investments, including the Systematic Investment Plan /existing systematic transfer plan from our UAE investors. We are internally reviewing the processes to establish enhanced due diligence for investment flows from the UAE and will come back to the revised process shortly. Senior MF industry executives say FAFT adding the UAE to the gray list is not a major concern at the moment. “If the Securities and Exchange Board of India or the government prohibits mandatory acceptance of investments from the United Arab Emirates, we may be forced to stop the subscription.
It’s a big market for us and we can’t stop them from investing in India,” says the managing director of a major fund house.
Although the exact number of UAE investments in MFs is not known, it may be “significant”, given the large Indian diaspora there. “We sincerely regret the inconvenience caused in this regard and ask for your support. While ensuring the best of our services, we ask you to understand that the proposed measures are made necessary only because of regulatory obligations”, a said Canara Robeco MF.
First published: Thursday, June 30, 2022. 10:19 PM IST