Lok Sabha Question No. 4921 (UNSTARRED), answered on 2026-03-23
Subject: Suspension of New Investments in the Motilal Oswal Nifty Micro-cap 250 Index Fund
Ministry: FINANCE
Asked by: Shri Jagannath Sarkar

(a) Yes.

- (b) to (c): SEBI has informed that Motilal Oswal Asset Management Company Limited submitted the draft scheme information document for Motilal Oswal Nifty Microcap

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS LOK SABHA UNSTARRED QUESTION NO. 4921

## TO BE ANSWERED ON MONDAY, 23 rd  MARCH, 2026/ CHAITRA 02, 1948 (SAKA)

'Suspension of New Investments in the Motilal Oswal Nifty Micro-cap 250 Index Fund'

## QUESTION

## 4921. Shri Jagannath Sarkar

## Will the Minister of FINANCE be pleased to state:

(a)  whether  the  Securities  and  Exchange  Board  of  India  (SEBI)  has  suspended  new investments into the Motilal Oswal Nifty Micro-cap 250 Index Fund from 8 January, 2026 due  to  the  absence  of  a  recognised  "micro-cap"  category  under  the  current  mutual  fund classification norms;

(b) if so, the details thereof including the timeline, basis and internal deliberations under which SEBI granted approval for the launch of the said micro-cap index fund in 2023 despite the apparent lack of a formal defining "micro-cap";

- (c) whether SEBI undertook a detailed investor risk assessment before approving the scheme and if so, the details and findings thereof;
- (d) the number of investors and total assets under management in the scheme at the time of suspension and the safeguards put in place to protect their interests; and
- (e)  the  steps  proposed  to  be  taken  by  SEBI,  including  any  revision  of  mutual  fund categorisation rules, to prevent recurrence of regulatory ambiguity and to ensure clarity for market participants?

## ANSWER MINISTER OF STATE FOR FINANCE (SH. PANKAJ CHAUDHARY)

250  Index  Fund  under  fast-track  processing  route.  SEBI  has  prescribed  a  detailed framework for scheme information documents, which is required to be complied with, for each scheme. The framework, inter-alia, includes detailed disclosures of all relevant risk  factors  and  strategy  for  risk  mitigations.  Under  the  fast-track  processing,  an undertaking related to disclosures of all relevant risk and their mitigations is provided by the Chief Executive Officer (CEO) of the concerned Asset Management Company. Upon examination of the requisite documents i.e. Do's and Don'ts and Undertaking by CEO, SEBI issued its final observations vide letter dated March 20, 2023, on the said scheme.

- (d) There were 2,49,363 investors and ₹2622.48 crores of total asset under management as on the date of suspension of new investment under the scheme viz. January 08, 2026. To  safeguard  the  interests  of  investors,  new  investments  in  schemes  have  been suspended and existing investors are allowed to redeem their investments.
- (e) To bring in clarity with respect to category of schemes, SEBI has issued a circular on Categorization and Rationalization of Mutual Fund Schemes on February 26, 2026, which provides classifications and categories of schemes that Mutual Funds are allowed to launch by following the due process.