Description

Nippon India Mutual Fund limits fresh subscriptions in Silver ETF Fund of Fund to Rs. 1 lakh per PAN per day effective October 15, 2025, due to premium in domestic silver prices affecting ETF valuation.

Summary

Nippon Life India Asset Management Limited has issued Notice cum Addendum No. 59 limiting fresh subscriptions in Nippon India Silver ETF Fund of Fund (FOF) to Rs. 1 lakh per PAN per day, effective October 15, 2025. This measure is implemented to protect investor interests due to shortage of physical silver in the domestic market, causing silver to trade at a premium relative to international prices, which inflates the price of silver ETF on the exchange and impacts the FOF’s valuation.

Key Points

  • Fresh/additional subscriptions, switch-ins, and new SIP/STP registrations limited to Rs. 1 lakh per PAN per day from October 15, 2025
  • Restriction applies until further notice
  • Existing SIPs, STPs, redemptions, and switch-out requests continue without impact
  • Domestic silver trading at premium due to physical silver shortage in market
  • Premium in domestic silver prices directly impacts Nippon India Silver ETF Fund of Fund valuation
  • Investment restrictions do not apply to regulatory-mandated investments (designated employee alignment and mandatory AMC contributions)
  • The scheme is an open-ended Fund of Fund investing in units of Nippon India Silver ETF
  • The underlying Nippon India Silver ETF replicates/tracks domestic price of silver

Regulatory Changes

No regulatory changes introduced. This is an AMC-initiated operational measure to protect investor interests in light of current market conditions affecting silver prices.

Compliance Requirements

  • Investors must comply with Rs. 1 lakh per PAN per day limit for fresh subscriptions, additional subscriptions, switch-ins, and fresh SIP/STP registrations
  • Terms of existing Scheme Information Document (SID) continue to apply for existing SIPs, STPs, and redemptions
  • This addendum becomes integral part of the Scheme Information Document and Key Information Memorandum
  • Exemptions apply for regulatory-mandated investments by designated employees and AMC contributions

Important Dates

  • Effective Date: October 15, 2025
  • Duration: Until further notice
  • Notice Date: October 15, 2025

Impact Assessment

Market Impact: The restriction addresses market distortion caused by domestic silver shortage leading to premium pricing. This protects existing unitholders from dilution due to inflated ETF valuations while limiting new investor exposure to unfavorable pricing conditions.

Investor Impact:

  • New investors and those making additional investments face daily subscription limits
  • Existing SIP/STP investors unaffected
  • Redemption flexibility maintained
  • Measure protects against investing at artificially inflated silver prices

Operational Impact: The AMC implements daily monitoring of subscriptions per PAN to enforce the Rs. 1 lakh limit. The temporary nature allows for adjustment when market conditions normalize.

Impact Justification

Medium importance as it affects only one specific fund's fresh subscriptions while protecting existing investors. Impact is medium as existing SIPs/STPs and redemptions remain unaffected.