Why PPFAS stopped taking investments from US, Canada
Mumbai: PPFAS Mutual Fund has stopped accepting investments from non-resident Indians based in the US and Canada, said chief executive officer Neil Parikh, at the fund house’s annual unitholders meeting recently. Parikh said this was because asset management companies are barred from marketing their fund in those countries.
Indian mutual fund companies need to register themselves with US and Canadian regulators if they want to market their funds there. Due to the cumbersome process of getting approvals from the regulators, almost all fund houses don’t offer online investing facilities to Indians residing outside the country.
“It seems that you cannot market your fund in these countries, and offering it online is also a form of marketing," said Parikh, explaining why the firm stopped accepting funds from both the countries. “We don’t want to get in trouble with the law"
To be sure, PPFAS is still accepting investments from those Indians living in the US and Canada if they apply for investments from India. NRIs can invest in Indian mutual funds using a non-resident external (NRE) or non-resident ordinary (NRO) accounts.
Suresh Sadagopan, an investment adviser, who has a few US and Canadian clients, said he does not recommend their investing in Indian mutual funds as they may find it difficult to file tax returns since most funds do not meet the compliance requirements of the tax authorities in the US or Canada. However, he said that some PMSes are compliant with these laws and can invest in them or in funds that are domiciled in those countries but investing primarily in India.
Since Persons of Indian Origin (PIOs) cannot invest in mutual funds online in most cases, some of them apparently hand over signed cheques to
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