The PPFAS Mutual Fund announced on Sunday that it will stop accepting inflows into the PPFAS Flexicap Fund as of February 2. The move comes after financial markets regulator Sebi ordered mutual fund companies to stop taking new subscriptions in programs investing in foreign stocks.
The directive to halt underwriting is primarily due to the mutual fund industry crossing the $7 billion mandatory limit for offshore investments.
”In order to avoid the industry-wide overseas limit overrun as permitted by RBI, in line with Sebi’s advice and Amfi’s clarification dated January 30, 2022, the schemes intending to invest in foreign securities must stop accepting inflows from February 2, 2022. As a result, we will stop all forms of subscription to the Parag Parikh Flexicap fund,’ the fund house said. in a tweet. Fund transactions received after the February 1 deadline will not be accepted or processed.
He further stated that ongoing SIPs/STPs (Systematic Investment Plan/Systematic Transfer Plans) will not be affected. This suspension is ”temporary in nature and will only continue until further improvement of the limit by regulators in this regard”.
PPFAS Flexicap Fund invests up to 35% of its corpus in foreign stocks, primarily stocks of US technology companies. In June 2021, Sebi raised the overseas investment limit for a mutual fund house to USD 1 billion from the existing USD 600 million. The aggregate limit for the mutual fund industry has been capped at $7 billion.
“Mutual funds may make investments overseas subject to a maximum of $1 billion per mutual fund, within the overall industry limit of $7 billion,” Sebi had said.
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