Description
Kotak Mahindra AMC temporarily suspends fresh subscriptions and switch-ins to Kotak Silver ETF Fund of Fund effective October 10, 2025, due to domestic silver premium caused by physical shortage.
Summary
Kotak Mahindra Asset Management Company Limited has temporarily suspended all fresh and additional lumpsum subscriptions and switch-in transactions to Kotak Silver ETF Fund of Fund effective October 10, 2025. This decision is driven by domestic silver trading at a premium to international prices due to physical shortage in the Indian market. The scheme invests in Kotak Silver ETF, which tracks domestic silver prices, making it directly impacted by the current premium. Redemptions and existing systematic plans remain operational.
Key Points
- Temporary suspension of fresh/additional lumpsum and switch-in transactions effective October 10, 2025
- Domestic silver trading at premium relative to international prices due to physical shortage
- All transactions timestamped on or before 3:00 PM on October 09, 2025, will be processed at applicable NAV
- Existing and new SIP, STP, and other systematic plans will continue to operate normally
- Redemptions and switch-outs remain permitted as per Scheme Information Document terms
- Suspension is temporary and will continue until further notice
- Kotak Silver ETF Fund of Fund is an open-ended Fund of Funds investing in Kotak Silver ETF units
Regulatory Changes
No regulatory changes. This is an operational measure taken by the fund house under existing framework to protect investor interests during abnormal market conditions.
Compliance Requirements
- Investors cannot make fresh lumpsum subscriptions or switch-ins to the scheme during suspension period
- Fund house must notify investors when suspension is lifted
- All other terms of SID/KIM remain unchanged
- This addendum forms integral part of scheme documentation
Important Dates
- October 09, 2025, 3:00 PM: Cut-off time for transactions to be accepted before suspension
- October 10, 2025: Effective date of subscription suspension
- Until further notice: Duration of temporary suspension
Impact Assessment
Investor Impact: High - Existing and prospective investors lose ability to make fresh investments or increase exposure to silver through this fund of fund route. However, systematic plans remain operational, providing some continued access. Redemption facility preserved protects liquidity for existing investors.
Market Impact: Medium - Reflects broader stress in domestic physical silver market with significant premium over international prices. Indicates supply constraints in Indian silver market affecting derivative investment products.
Fund Operations: The suspension protects existing investors from potential NAV distortions caused by abnormal domestic premium while maintaining essential operational functions through systematic plans and redemption facilities.
Impact Justification
Complete suspension of fresh subscriptions to a commodity ETF fund of fund affects investor access and indicates significant market disruption in domestic silver market.