Why Parag Parikh AMC Ceases Fresh Subscriptions in Parag Parikh Flexi Cap Fund?

We all know that Parag Parikh Flexi Cap Fund is a top performing “Flexi Cap” Fund. It was earlier a “Value Fund” which invests primarily in underlying valued portfolio. In it’s long journey it embarked huge wealth to their investors.

We all know that SEBI(Securities and Exchange Board of India)has the right to alert the amc’s directions as a result it was turned from “Value Fund” to “Flexi Cap” Fund. Now it’s the turn of the amc to follow on the directives issued by securities and exchange board of india

As per SEBI Rules amc’s are instructed to cease fresh subscriptions if the fund’s AUM(Assets Under Management)has crossed specified limits. Being a top performer naturally the fund’s AUM has crossed USD 7 Billion and it is against the circular of SEBI for overseas funds(As Parag Parikh invests primarily in US Stocks in addition to Indian stocks the fund’s AUM has exceed SEBI’s prescribed limit)

Do note that -“Parag Parikh(“PPFAS AMC”)Flexi Cap has temporarily suspended fresh inflows including lumpsums and switch-in from other schemes. But the on-going SIP’s(Systematic Investment Plans won’t be affected. It will be continued as usual. Only the fresh inflows will be effected”.

Parag Parikh has announced that this act will be commenced from February 2nd,2022 and all the fresh inflows were shut-down before the cut-off time of February 1st,2022 i.e all the fresh subscriptions would be ceased after 3.00 PM(Cut-Off Time)of February 1st,2022.

PPFAS amc has announced that this is a “Temporary Suspension of restricting fresh inflows” and once the regulator(SEBI)modifies its existing terms regarding AUM, sooner the amc will commence fresh subscriptions.

Parag Parikh Flexi Cap is a strong performer in all market conditions and it might be a bad news for new investors to make fresh subscriptions. But still there’s a chance- A New investor can induce fresh subscription on or before February 1st,2022 that too before 3 P.M(Cut-Off Time).Once the market regulator (SEBI)relaxes guidelines they are free to invest further. They have to wait for the market regulator nod up to then they are allowed to invest on or before February 1st,2022 cut-off time(3PM)

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