Description

HSBC Mutual Fund temporarily suspends fresh subscriptions, switch-ins, and new SIP/STP/IDCW registrations in four overseas investment schemes effective December 3, 2025 to comply with overseas investment limits.

Summary

HSBC Mutual Fund has temporarily suspended fresh subscriptions in four schemes investing in overseas securities effective from close of business hours on December 3, 2025. This action is taken to comply with SEBI’s overseas investment limits established in June 2022. The suspension includes lumpsum purchases, switch-ins, and fresh registrations of SIP, STP, and IDCW Transfer Plans. Existing SIPs, redemptions, and switch-outs remain unaffected.

Key Points

  • Temporary suspension of fresh subscriptions effective from December 3, 2025 close of business
  • Four schemes affected: HSBC Global Equity Climate Change Fund of Fund, HSBC Asia Pacific (Ex Japan) Dividend Yield Fund, HSBC Brazil Fund, and HSBC Global Emerging Markets Fund
  • Suspension applies to lumpsum purchases, switch-ins, and fresh SIP/STP/IDCW Transfer Plan registrations
  • Existing SIP/STP/SWP/IDCW instalments continue to be processed
  • Redemptions and switch-outs remain operational
  • Fresh applications received after 3:00 PM cut-off time on December 3, 2025 will be rejected with refunds within 5 business days
  • Measure is based on SEBI directive from June 17, 2022 regarding overseas investment limits

Regulatory Changes

SEBI’s letter dated June 17, 2022 permitted AMCs to make investments in overseas funds/securities up to the headroom available without breaching the overseas investment limits as of February 1, 2022 at the Fund level. This circular implements compliance measures to avoid potential breach of these regulatory limits.

Compliance Requirements

  • HSBC Asset Management must monitor headroom availability for overseas investments
  • The fund must not breach overseas investment limits set as of February 1, 2022
  • Processing of existing SIP and IDCW Transfer Plan instalments where designated schemes are target schemes will be reviewed based on available headroom
  • Fresh applications must have funds realized on or before 3:00 PM cut-off time on the Effective Date
  • Applications received after cut-off time must be rejected with refunds within 5 business days

Important Dates

  • December 3, 2025: Effective date for temporary suspension (close of business hours)
  • 3:00 PM on December 3, 2025: Cut-off time for acceptance of fresh applications
  • Within 5 business days: Timeline for refunding rejected applications
  • Until further notice: Duration of suspension (until SEBI/RBI enhances overseas investment limits or headroom increases)

Impact Assessment

Investor Impact: Investors looking to make fresh investments in the four designated overseas schemes will be unable to do so through lumpsum, switch-ins, or new SIP/STP registrations. However, existing systematic plans continue unaffected, providing continuity for current investors. Redemptions and switch-outs remain available, ensuring liquidity is not compromised.

Market Impact: Limited market impact as this is scheme-specific and affects only four overseas investment schemes of HSBC Mutual Fund. The measure reflects broader industry challenges with overseas investment limits and may indicate similar actions by other fund houses facing headroom constraints.

Operational Impact: The fund will need to continuously monitor headroom availability and may need to issue further notices regarding processing of existing SIP instalments in these schemes. The suspension will continue until regulatory limits are enhanced or market conditions create additional headroom.

Impact Justification

Affects investors in four specific HSBC overseas schemes but allows existing SIPs and redemptions to continue; temporary measure due to regulatory compliance with overseas investment limits