Description

Nippon India Mutual Fund restricts fresh subscriptions in Silver ETF Fund of Fund to Rs. 1 lakh per PAN per day effective October 15, 2025, due to domestic silver shortage causing inflated ETF prices.

Summary

Nippon India Mutual Fund has imposed temporary subscription limits on its Silver ETF Fund of Fund (FOF) effective October 15, 2025. Due to a shortage of physical silver in the domestic market causing silver to trade at a premium relative to international prices, fresh subscriptions are now limited to Rs. 1 lakh per PAN per day. This measure is implemented to protect investor interests given the inflated valuation of the underlying Silver ETF.

Key Points

  • Fresh/additional subscriptions and switch-ins limited to Rs. 1 lakh per PAN per day
  • New SIP/STP registrations also subject to the Rs. 1 lakh per PAN per day limit
  • Domestic silver shortage causing premium pricing relative to international markets
  • Existing SIPs, STPs, and redemption/switch-out requests remain unaffected
  • Restrictions do not apply to regulatory-mandated investments (designated employee alignment and AMC mandatory contributions)
  • Temporary measure effective until further notice

Regulatory Changes

No regulatory changes. This is an operational restriction imposed by the AMC under its discretion to protect investor interests during adverse market conditions.

Compliance Requirements

  • Investors must adhere to the Rs. 1 lakh per PAN per day limit for fresh subscriptions, additional investments, switch-ins, and new SIP/STP registrations
  • Distributors and platforms must implement subscription limits at transaction level
  • AMC to monitor market conditions and review restrictions as necessary

Important Dates

  • October 15, 2025: Effective date of subscription limits
  • Until further notice: Duration of temporary restrictions

Impact Assessment

Market Impact: The domestic silver shortage has created a pricing premium that inflates the Silver ETF’s exchange price, directly impacting FOF valuation. This subscription limit prevents potential disadvantage to existing unitholders from inflows at artificially elevated prices.

Investor Impact: New and existing investors face restrictions on fresh capital deployment in this scheme. However, existing systematic plans and redemption rights are fully protected. Investors seeking silver exposure may need to consider alternative investment vehicles or wait for market normalization.

Operational Impact: The AMC has implemented prudent risk management to protect unitholder interests during market dislocation. This demonstrates proactive fund governance in response to commodity market stress.

Impact Justification

Affects investors in Nippon India Silver ETF FOF with temporary subscription restrictions due to market conditions; existing SIPs and redemptions unaffected