Description

Kotak Mahindra AMC temporarily suspends fresh subscriptions and lumpsum investments in Kotak Silver ETF Fund of Fund due to premium in domestic silver prices caused by physical silver shortage.

Summary

Kotak Mahindra Asset Management Company Limited has temporarily suspended all fresh/additional lumpsum and switch-in transactions in the Kotak Silver ETF Fund of Fund effective October 10, 2025. The suspension is due to domestic silver trading at a premium to international prices caused by a physical silver shortage in the domestic market. The scheme invests in Kotak Silver ETF which tracks domestic silver prices, making it directly impacted by this premium.

Key Points

  • Fresh subscriptions, additional lumpsum investments, and switch-ins suspended effective October 10, 2025
  • Transactions timestamped on or before 3:00 PM on October 09, 2025 will be accepted and processed at applicable NAV
  • Existing and new Systematic Investment Plans (SIP) and Systematic Transfer Plans (STP) will remain operational
  • Redemptions and switch-outs will continue to be permitted as per Scheme Information Document terms
  • Suspension is temporary and will continue until further notice
  • Cause: Domestic silver trading at premium due to physical silver shortage in India

Regulatory Changes

No regulatory changes. This is an operational decision by the Asset Management Company within existing regulatory framework to protect investor interests during abnormal market conditions.

Compliance Requirements

  • Distributors and intermediaries must inform investors about the suspension of fresh subscriptions
  • All purchase/switch-in requests received after the cutoff time will not be processed
  • Scheme Information Document (SID) and Key Information Memorandum (KIM) to be read with this addendum
  • Investors seeking to invest in silver ETF exposure should be advised of the temporary restriction

Important Dates

  • October 09, 2025, 3:00 PM: Last timestamp for transactions to be accepted and processed
  • October 10, 2025: Effective date of suspension of fresh subscriptions
  • Until Further Notice: Duration of suspension period

Impact Assessment

Investor Impact: Investors seeking new exposure to Kotak Silver ETF Fund of Fund cannot make fresh lumpsum investments or switch-ins. However, existing investors can continue SIPs and redeem units normally. This protects new investors from entering at potentially unfavorable valuations during the domestic silver premium situation.

Market Impact: Limited broader market impact as this affects only one specific fund scheme. The measure is protective in nature, preventing new investors from buying into the fund when domestic silver prices are at a premium to international prices.

Operational Impact: Asset Management Company demonstrates prudent risk management by temporarily closing the scheme to new subscriptions during adverse market conditions. This is in the interest of both existing and potential investors.

Impact Justification

Affects only investors in one specific fund scheme; existing SIPs continue and redemptions remain permitted; temporary measure due to market conditions