EXECUTIVE DIRECTOR

INVESTMENT MANAGEMENT DEPARTMENT

SEBI/IMD/CIR No.3/93334/07

May 14, 2007

All Mutual Funds Registered with SEBI

Association of Mutual Funds in India (AMFI)

Dear Sirs,

Re: Investment in ADRs/GDRs/Foreign Securities and overseas ETFs by Mutual Funds

1. Please refer to SEBI Circulars SEBI/IMD/CIR No.7/73202/06 dated August 2, 2006 and SEBI/IMD/CIR No.13/83589/07 dated January 4, 2007 pertaining to investment in ADRs/GDRs/foreign securities and overseas ETFS by mutual funds.

2.  Pursuant to the enhancement in overseas investment limits by RBI, it has now been decided that mutual funds can invest in ADRs/GDRs/Foreign Securities within overall limit of US$4 bn. This will be a  with a sub-ceiling for individual mutual funds which should not exceed 10% of the net assets managed by them as on March 31 of each relevant year and subject to a maximum of US$200 mn. per mutual fund.

3. All other conditions specified in the above mentioned circulars remain unchanged.

4. These guidelines are issued in exercise of powers conferred under Section 11(1) of the Securities and Exchange Board of India Act, 1992 read with the provisions of Regulation 77 of SEBI (Mutual Funds) Regulations, 1996.

Yours faithfully,

R. K. Nair

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