Motilal Oswal MF to reopen two foreign ETFs for market makers

NEW DELHI: Asset management company Motilal Oswal Mutual Fund is set to reopen two international programs, Motilal Oswal Nasdaq Q50 ETF and Motilal Oswal Nasdaq 100 ETF, from Monday for subscription or creation of units.

Admittedly, the two exchange-traded funds (ETFs) would only be open to authorized participants or market makers from September 19 until further notice.

Liquidity in ETFs is created by market makers called authorized participants, who are pre-appointed by AMCs to enhance the liquidity of ETFs.

In February, the Securities and Exchange Board of India (Sebi) advised mutual funds investing in foreign securities to stop new investments in foreign stocks to avoid exceeding overseas limits in India. industry scale.

The regulator specified an aggregate limit of $7 billion for mutual funds to invest in foreign securities and funds and a separate limit of $1 billion for investing in foreign ETFs.

The Association of Mutual Funds in India (Amfi) had notified in June that mutual funds could resume subscriptions and make investments in foreign funds/securities up to the available margin without breaching the investment limits. abroad on February 1, 2022.

“Now, as we have margin available with us, we are reopening direct creation in Motilal Oswal Nasdaq Q50 ETF and Motilal Oswal Nasdaq 100 ETF only for authorized participants/market makers,” Motilal Oswal Mutual Fund said in a notice.

“We will monitor the regulatory limits and once the limited margin is reached, we will have to restrict the subscription again,” he added.

Investors should note that the fund house maintains the subscription, purchase or SIP restriction for Motilal Oswal S&P 500 Index Fund, Motilal Oswal Nasdaq 100 ETF Fund of Fund and Motilal Oswal MSCI EAFE Top 100 Select Index Fund.

The fund house also stressed that it is constantly engaging with the regulator to tighten limits on overseas investment by mutual funds.

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