Motilal Oswal Halts Nifty Microcap Fund Inflows Over SEBI Norms

MUTUAL-FUNDS

Overview

Motilal Oswal Asset Management Company has paused new investments in its Nifty Microcap 250 Index Fund from January 8. The move stems from discussions with SEBI regarding micro-cap classification not being a distinct category. Existing investors remain unaffected, with interim fund management continuing its stated approach. Transactions post January 8 deadline will be refunded.

Motilal Oswal Asset Management Company (AMC) announced it has paused fresh inflows into its Motilal Oswal Nifty Microcap 250 Index Fund, effective January 8, 2026. This decision follows consultations with the Securities and Exchange Board of India (SEBI) regarding the scheme's alignment with current mutual fund categorisation rules. SEBI does not recognize micro-cap as a standalone category under its existing framework.

Regulatory Scrutiny

The fund's investment strategy focuses on approximately 250 stocks that fall outside the Nifty 500 index, targeting companies with smaller market capitalizations. Motilal Oswal stated it is actively discussing the path forward with SEBI. The asset manager assured that existing investors in the scheme have no cause for concern. The fund will continue to be managed in line with its initial investment objective and approach.

Interim Fund Management

All existing investments within the scheme remain unaffected by this pause. Any transactions submitted after 3:00 PM on January 8 will not be processed and will be subject to refund according to standard procedures. The AMC indicated it is working towards a resolution with the regulator.

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