Capital markets regulator Sebi has permitted mutual funds to again invest in foreign stocks within the aggregate mandated limit of USD 7 billion for the industry.
This came in the wake of a major correction in global markets that brought down the valuation of international stocks.
In January, Sebi had asked mutual fund houses to stop taking fresh subscriptions in schemes investing in overseas stocks. The directive to stop subscription was mainly on account of the mutual fund industry crossing the mandated limit of USD 7 billion for overseas investments.
The recent meltdown in global stocks reduced the cumulative value of investments made by all the mutual fund houses together.
“Mutual fund schemes may resume subscriptions and make investments in overseas funds/securities up to the headroom available without breaching the overseas investment limits as of end-of-day of February 1, 2022, at the mutual fund level,” Sebi said in a communication sent to Amfi on Friday. Also, the regulator has asked Association of Mutual Funds in India (Amfi) to ensure that the total utilisation of the overseas limit by each AMC remains capped at the February level.
