Description

HSBC Mutual Fund temporarily suspends fresh subscriptions, lumpsum purchases, and new SIP/STP registrations in four overseas investment schemes due to overseas investment limit constraints.

Summary

NSE has disabled fresh subscriptions for four HSBC Mutual Fund schemes investing in overseas securities, effective December 3, 2025. The suspension applies to lumpsum purchases, switch-ins, and fresh registrations of SIP, STP, and IDCW Transfer Plans. This action is taken to comply with SEBI’s overseas investment limits set in its June 17, 2022 directive, which restricts AMCs to headroom available as of February 1, 2022. Redemptions, switch-outs, SWP registrations, and existing SIP/STP installments continue to be processed.

Key Points

  • Four HSBC schemes suspended for fresh subscriptions: 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
  • Effective from close of business hours on December 3, 2025
  • Fresh applications received after cut-off time on effective date will be rejected and refunded within 5 business days
  • No restrictions on redemptions, systematic withdrawal plans (SWP), switch-outs, and STP-out transactions
  • Existing SIP and STP installments will continue to be processed
  • Suspension based on SEBI directive dated June 17, 2022 regarding overseas investment limits

Regulatory Changes

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

Compliance Requirements

  • NSE Members must inform investors about the suspension of fresh subscriptions in the four designated HSBC schemes
  • AMC must reject fresh applications received after the cut-off time on December 3, 2025
  • Refunds for rejected applications must be processed within 5 business days
  • Processing of existing SIP and IDCW Transfer Plan installments where designated schemes are target schemes will be reviewed based on available headroom

Important Dates

  • December 3, 2025: Effective date for suspension of fresh subscriptions (close of business hours)
  • February 1, 2022: Reference date for overseas investment limits set by SEBI
  • June 17, 2022: Date of SEBI directive on overseas investment limits
  • Until further notice: Duration of suspension (temporary until limits are enhanced by SEBI/RBI or headroom increases)

Impact Assessment

The suspension affects investors seeking to make new investments in four HSBC overseas schemes but maintains continuity for existing investors through ongoing redemptions and SIP processing. The measure is protective in nature, preventing regulatory breaches while allowing orderly management of existing investments. Market impact is limited to HSBC Mutual Fund investors in these specific schemes. The suspension will remain until SEBI/RBI enhances overseas investment limits or available headroom increases naturally through market movements or redemptions.

Impact Justification

Affects investors in specific HSBC schemes but does not impact broader market operations. Redemptions and existing SIPs remain operational. Temporary measure due to regulatory overseas investment limits.