Sebi permits mutual funds to invest in overseas funds with limit on exposure to Indian securities | Stock Market News

SEBI has allowed mutual funds to invest in overseas mutual funds or unit trusts that invest a portion of their assets in Indian securities, aiming to enhance investment ease and transparency. The total exposure to Indian securities by these overseas funds should not exceed 25% of their net assets. If the exposure exceeds this limit, Indian mutual funds have six months to rebalance their assets. During this period, fresh investments in these overseas funds are not permitted. If rebalancing is not achieved within the observance period, the Indian mutual fund scheme must liquidate its investment within the next six months. The new provisions are effective immediately. This regulation aims to facilitate ease of investment in overseas funds while ensuring transparency and diversification. The contributions of investors will be combined into a single investment vehicle, with no side-vehicles, ensuring all investors have proportionate rights. There will be no advisory agreements to avoid conflicts of interest.