Nippon Life India Asset Management has suspended lumpsum investment and fresh SIP registration in four of its overseas schemes — Nippon India US Equity Opportunities Fund, Japan Equity Fund, Taiwan Equity Fund and ETF Hang Seng BeES. The decision was taken to ensure that the prevailing headroom for overseas investment prescribed by SEBI is not breached, said the fund house.

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Subscription in four overseas schemes of Nippon India Mutual Fund through lumpsum, switch-ins and fresh registration of SIPs/STPs was suspended with effect from Monday, said the fund house. Further applications for creation of units of Exchange Traded Funds (ETF) received directly by the AMC from investors will also not be processed, it said.

However, the suspension is not applicable for intra-scheme switches between plans and options in the same scheme and existing registered SIP/STP or such other special product transactions, it added.

Suspension temporary

The suspension of fresh investment is temporary and will be reviewed based on any increase in available headroom without breaching overseas investment limits mentioned above or further enhancement of limit by regulators, said the fund house.

RBI has set an overall industry limit of $7 billion for investment in overseas entities through mutual fund schemes and a separate window of $1 billion is available for investments through ETFs. In January 2022, SEBI had banned fresh investment in overseas schemes of mutual funds in order to avoid breach of industry-wide overseas investment limits as allowed by RBI.

However, in June 2022, it allowed MFs to accept investments in overseas schemes up to the headroom available without breaching the prevailing limits. Ever since, mutual funds have been accepting and stopping investment in their overseas schemes within the available headroom.