India May Allow Foreigners to Invest in Mutual Funds
2011-05-23 14:57:41
The Indian government may allow foreigners to invest in local mutual funds from July, a senior official said Monday.
The government may cap foreign investments in local mutual funds at $10 billion, said the official who didn't wish to be named.
Finance Minister Pranab Mukherjee, while presenting the federal budget on Feb. 28, had allowed mutual funds registered with the Securities and Exchange Board of India to accept subscriptions from foreign investors who meet regulatory requirements.
Currently, only foreign funds and sub-accounts registered with the regulator, and non-resident Indians are allowed to invest in local mutual funds.
Indian mutual funds aren't sold abroad. The step to allow foreigners to invest in their individual capacity would widen the investor base for the mutual fund sector.
The official said foreign investors will be able to buy mutual funds through depositories already functioning in their countries or by opening an account with Indian depositories.
There's no limit on investment in equity by foreign institutional investors.