Description

Motilal Oswal discontinues all fresh subscriptions and SIP registrations for Nifty Microcap 250 Index Fund with immediate effect from January 8, 2026, as microcap is not defined as a SEBI category based on market capitalization.

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 includes fresh purchases, additional purchases, switch-ins, new SIP/STP registrations, and pausing of existing SIPs/STPs.

Key Points

  • Fresh and additional purchases through lump sum mode discontinued with immediate effect
  • Switch-in transactions from other Motilal Oswal Mutual Fund schemes discontinued
  • Fresh registrations under Systematic Investment Plan (SIP) and Systematic Transfer Plan (STP) discontinued
  • Existing SIPs/STPs paused effective from January 8, 2026
  • Switch-in transactions received till January 8, 2026 up to cut-off time will be processed
  • Subscription amounts received after cut-off time will be refunded without interest
  • Decision made in consultation with SEBI due to microcap not being defined as a market capitalization category

Regulatory Changes

The discontinuation is issued in consultation with SEBI due to regulatory concerns that microcap is not defined as a category based on market capitalization. This represents a regulatory clarification affecting how funds can be categorized and offered to investors.

Compliance Requirements

  • Fund house must discontinue all fresh subscriptions immediately
  • All subscription amounts received after the cut-off time on January 8, 2026 must be refunded to investors without interest
  • Existing SIP/STP registrations must be paused
  • Switch-in transactions received till cut-off time on January 8, 2026 must be processed
  • Addendum forms integral part of Scheme Information Document (SID) and Key Information Memorandum (KIM)

Important Dates

  • January 8, 2026: Effective date and cut-off time for discontinuation
  • January 8, 2026: Last date for processing switch-in transactions (up to cut-off time)
  • Immediate Effect: Pausing of existing SIPs/STPs from effective date

Impact Assessment

This discontinuation has significant impact on existing and potential investors in the Motilal Oswal Nifty Microcap 250 Index Fund. Current investors with active SIPs/STPs will see their systematic investments paused immediately. New investors cannot enter the scheme through any mode (lump sum, SIP, STP, or switch-in). The decision reflects SEBI’s regulatory stance on fund categorization and may set a precedent for other microcap-focused funds. Investors seeking microcap exposure will need to explore alternative investment vehicles that comply with SEBI’s market capitalization category definitions.

Impact Justification

Complete discontinuation of fresh subscriptions and existing SIP/STP pausing affects all current and potential investors in the scheme, issued in consultation with SEBI due to regulatory concerns about microcap category definition