Investors Free To Invest In Foreign Mutual Funds

Jul 28,2006 00:00 by correspondent
The Reserve Bank Of India has decided to ease overseas investment
norms for mutual funds that will now provide an opportunity to
investors to look at new opportunities in the global markets.

According to A P Kurien, chairman, AMFI, although RBI's relaxation
was an initial step towards launch of schemes by domestic mutual
funds in overseas markets the funds will have to wait for SEBI
guidelines to launch their schemes.

Reserve Bank of India announced liberalized norms on Thursday, which
raises the aggregate ceiling for overseas investment by the funds to
$2 billion, from $1 billion previously.

RBI has also removed the previous requirement that MFs can invest in
overseas securities of only those foreign companies, which have a 10
per cent stake in an Indian company listed in India.

Earlier, MFs were permitted to invest in ADRs/GDRs of Indian
companies, rated debt instruments and equity of overseas companies
listed on a recognized stock exchange abroad and having a
shareholding of at least 10 per cent in a listed Indian company.