Motilal Oswal Mutual Fund wrote to the investors to discuss the impact of Sebi’s portfolio allocation rules for multi cap funds on Motilal Oswal Multicap 35 Fund. Sebi recently came out with new rules for multi cap funds to put at least 25% each in large cap, mid cap and small cap stocks. Motilal Oswal Mutual Fund, in its note mentioned that the AMC is in touch with AMFI regarding representation to Sebi on various aspects of the circular. Also, the fund house mentioned that as clarified by Sebi, the scheme has an option to merge or convert the scheme to some other category to protect the interest of investors at large.
Motilal Oswal Multicap 35 Fund manages assets worth ₹11,240 crore. It is the third largest fund in the multicap catgeory.
The AMC mentioned three points to be considered by the investors. Here’s what the AMC has written in note to the investors of Motilal Oswal Multicap 35 Fund:
- ‘Firstly, the industry body, AMFI, is in the due process of making a representation to SEBI on various aspects of the new circular. We are in touch with AMFI on various aspects of their representation to continue the current dynamic nature of the Multicap category. SEBI has always been open to suggestions that are in the interest of Unitholders. In fact, SEBI has issued a clarification today that it will examine proposals of the industry, if any, received in this regard.’
- ‘Secondly, as an AMC we have a lot of options of merging or converting the fund into other categories that retain the current risk reward of the fund. SEBI has also issued a clarification that Mutual Funds could merge or covert their Multicap schemes into another scheme category. We want to assure you that any step we take would be keeping in priority the unitholder’s interest first. All of this will be done by following due process of law and appropriate approval of Unitholders, Trustees and Regulators.’
- ‘Thirdly, as the largest investor into the fund are the Sponsors / Promoters. This fund is also significant in terms of percentage of their wealth. The well- being of the fund is in the interest of all stakeholders involved.’
The AMC has asked its investors to show patience until the final solution is presented. “We strongly urge you to consult your financial advisor before you take any decisions. Our entire team is working hard to ensure your money and the objective of the fund is taken care of,” said the mutual fund house.