Description

Motilal Oswal Asset Management has discontinued fresh subscriptions in the Nifty Microcap 250 Index Fund with immediate effect from January 8, 2026, following SEBI consultation as microcap is not defined as a market capitalization category.

Summary

Motilal Oswal Asset Management Company Limited has discontinued subscription in units of Motilal Oswal Nifty Microcap 250 Index Fund with immediate effect from the cut-off time of January 8, 2026. This decision was made in consultation with SEBI as microcap is not defined as a category based on market capitalization. The discontinuation affects fresh purchases, additional purchases, switch-ins, and all new and existing SIP/STP registrations.

Key Points

  • Fresh and additional purchases through lump sum mode discontinued immediately
  • Switch-in transactions from other Motilal Oswal Mutual Fund schemes stopped
  • Fresh registrations under SIP and STP discontinued
  • Existing SIPs/STPs paused effective from January 8, 2026
  • Switch-in transactions received until cut-off time on January 8, 2026 will be processed
  • Any subscription amount received after cut-off time will be refunded without interest
  • Decision made in consultation with SEBI
  • Reason: Microcap is not defined as a category based on market capitalization

Regulatory Changes

SEBI consultation led to the discontinuation as microcap does not qualify as a defined category based on market capitalization. This represents a regulatory clarification on fund categorization that necessitates closure of fresh subscriptions for this specific fund.

Compliance Requirements

  • AMC must refund any subscription amounts received after January 8, 2026 cut-off time without interest
  • All pending switch-in transactions received until cut-off time on January 8, 2026 must be processed
  • Existing SIP/STP arrangements must be paused
  • This addendum forms an integral part of the Scheme Information Document (SID) and Key Information Memorandum (KIM)
  • All other terms and conditions of SID and KIM remain unchanged

Important Dates

  • Effective Date: January 8, 2026 (cut-off time)
  • Circular Date: January 8, 2026
  • Last Date for Switch-in Processing: January 8, 2026 (up to cut-off time)
  • SIP/STP Pause Date: January 8, 2026

Impact Assessment

Investor Impact: High - Existing investors cannot make additional investments through any mode (lump sum, SIP, STP, or switch-in). Existing SIP/STP arrangements are paused, requiring investors to redirect their systematic investment plans to other schemes.

Market Impact: Medium - While this affects only one specific fund, it sets a precedent for regulatory treatment of microcap categorization in mutual funds. Investors seeking microcap exposure will need to find alternative investment vehicles.

Operational Impact: High - The AMC must immediately halt all subscription processing, pause all existing systematic plans, process refunds for post-cut-off subscriptions, and communicate changes to all distributors and investors.

Impact Justification

Immediate closure of a mutual fund scheme affecting all existing and potential investors with immediate effect on subscriptions, SIPs, and STPs