Description

NSE suspends fresh subscriptions, SIP registrations, and switch-ins for Motilal Oswal Nifty Microcap 250 Index Fund with immediate effect from January 8, 2026 cut-off time.

Summary

NSE has disabled fresh subscriptions in Motilal Oswal Nifty Microcap 250 Index Fund on the NSE MF Invest Platform with immediate effect from January 8, 2026 cut-off time. This action follows communication from Motilal Oswal Mutual Fund and consultation with SEBI, as microcap is not defined as a category based on market capitalization. The suspension includes lumpsum subscriptions, fresh SIP/STP registrations, and switch-in transactions, while existing SIPs/STPs will be paused.

Key Points

  • Fresh and additional lumpsum purchases discontinued with immediate effect
  • Fresh registrations under SIP and STP discontinued
  • Switch-in transactions from other Motilal Oswal MF schemes discontinued
  • Existing SIPs/STPs paused from effective date (January 8, 2026)
  • No restrictions on redemptions, SWPs, switch-out, and STP-out transactions
  • Subscription amounts received after January 8, 2026 cut-off time will be refunded without interest
  • Switch-in transactions received until January 8, 2026 cut-off time will be processed
  • Action taken in consultation with SEBI due to undefined microcap category

Regulatory Changes

This discontinuation is issued in consultation with SEBI as microcap is not defined as a category based on market capitalization under current regulations. The suspension represents a regulatory alignment measure to address the absence of a formal microcap definition in SEBI’s mutual fund categorization framework.

Compliance Requirements

For Members/Distributors:

  • Stop accepting fresh subscription requests for Motilal Oswal Nifty Microcap 250 Index Fund
  • Disable lumpsum, SIP, STP, and switch-in options on NSE MF Invest Platform
  • Process refunds for any subscription amounts received after January 8, 2026 cut-off time
  • Continue processing redemptions, SWPs, switch-out, and STP-out without restrictions

For Motilal Oswal AMC:

  • Refund subscription amounts received after effective date without interest
  • Update Scheme Information Document (SID) and Key Information Memorandum (KIM) with this addendum

Important Dates

  • January 8, 2026 (Cut-off time): Effective date for discontinuation of fresh subscriptions
  • January 9, 2026: NSE circular issued (Ref No: NSE/NMFTM/72198, Circular No: 1108/2025)
  • Existing SIPs/STPs paused from January 8, 2026
  • Switch-in transactions received until January 8, 2026 cut-off time will be processed

Impact Assessment

Investor Impact (High):

  • Investors cannot make fresh investments in this microcap index fund
  • Existing SIP investors will have their systematic investments paused
  • No impact on exit options - investors can redeem or switch out freely

Market Impact (High):

  • Reflects regulatory uncertainty around microcap mutual fund category definition
  • May impact investor access to microcap segment through mutual fund route
  • Sets precedent for other microcap-focused schemes pending regulatory clarity

Operational Impact (Medium):

  • AMC must process refunds for post-cutoff subscriptions
  • Distribution platforms need to update system configurations
  • Existing SIP mandates remain valid but paused, requiring potential reactivation process once restrictions lift

Impact Justification

Complete suspension of fresh subscriptions and pausing of existing SIPs/STPs affects all investors in this fund category, issued in consultation with SEBI due to undefined microcap category