look news india
Mutual funds invest in foreign funds: Indian mutual funds can now invest in foreign mutual funds and unit trusts. Market regulator SEBI has allowed mutual funds to invest in foreign mutual funds. However, certain conditions apply.
SEBI's proposal states that mutual funds will be able to invest in foreign funds with an upper limit of 20 per cent of the total exposure in foreign funds. SEBI said this in the advisory letter issued on May 17. The investment structure for mutual funds does not prevent them from investing in such funds. But at the same time, Indian mutual funds are the only funds which refrain from investing.
What are the conditions?
Regulators cannot abuse this structure. At the same time, investors will also have to be assured of providing an effective cost structure. If foreign funds are offered by Indian mutual funds, significant allocation from investments made in foreign mutual funds and unit trusts will have to be made in Indian securities as well. Therefore it is advisable to invest in foreign funds with limited exposure to Indian securities with an upper limit of 20 per cent.
Ease in KYC also
Some people are facing the problem of registering KYC in mutual funds. Keeping this in mind, SEBI has simplified the KYC process. Now PAN or Aadhar card is not required for KYC. It has removed the requirement of linking PAN with Aadhaar to obtain KYC registered status. However, to get KYC status, PAN card will have to be linked with other ID proofs including driving license, passport link instead of Aadhaar number.
