The Securities and Exchange Board of India (Sebi) has advised mutual funds investing in overseas securities to stop further investments in foreign stocks to avoid breach of industry-wide overseas limits, two industry executives independently confirmed to Mint on the condition of anonymity Mutual funds can make overseas investments up to $1 billion per mutual fund, with the overall industry limit of $7 billion, according to a Sebi circular of 3 June 2021. The suspension is likely to be temporary and could be revoked once the limits are enhanced by the regulator.
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Following the Sebi directive, the Association of Mutual Funds in India (Amfi) has asked fund houses to stop accepting flows in schemes investing overseas from 2 February. However, existing SIPs and STPs have been allowed to continue Franklin Templeton Mutual Fund released a notice on Saturday announcing suspension of lump-sum subscription, switch-ins, and fresh registration of SIP/STP for its three overseas funds, Franklin India Asian Equity Fund, Franklin India Feeder-Franklin US Opportunities Fund and Franklin India Feeder -Templeton European Opportunities Fund, after 28 January 2021. The fund house temporarily withdrew the notice, but may be forced to reinstate it after the Amfi guidance.
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