It’s a setback for NRI (Non Resident Indians) and PIO (Persons of Indian Origin) investors residing in the United States (US) and Canada as they can no longer invest in the mutual fund (MF) schemes of L&T AMC (Asset Management Company).
As HSBC gets the rights to manage, operate and administer the existing L&T MF schemes after HSBC Securities and Capital Markets (India) Private Limited (HSCI) fully acquired L&T Investment Management Limited (LTIM), even the ongoing investments through SIP (systematic investment plan) and STP (systematic transfer plan) of existing investors residing in US and Canada get discontinued from November 24, 2022.
This is because the US and Canada residents were allowed to invest in the MF schemes of L&T, while HSBC doesn’t allow the residents of the two countries from investing in its schemes.
As per the Scheme Information Documents of HSBC MF Schemes, HSBC AMC does not allow the following persons/ entities to invest in any of its schemes:
- United States Person as defined under the Laws of the United States of America, including, without limitation, the rules and regulations promulgated by the US Securities and Exchange Commission and the US Commodity Futures Trading Commission; or is a person who has elected to be treated as a US tax resident for US federal income tax purposes; and
- Persons residing in Canada.
In accordance with this, with effect from the effective date – that is November 24, 2022 – HSBC AMC shall not accept any transactions requests (other than non-financial transactions and redemptions) from above-stated categories of unit holders. Points to be noted that there shall be no restriction for such categories of unitholders from redeeming their investments.
It is however not clear for how long the existing investors from the US and Canada can stay invested after the folios of erstwhile L&T MF schemes get transferred to HSBC AMC.