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Canadian citizen's investments in mutual funds

Offering funds to retail investors involves a cumbersome registration procedure - each province in Canada specifies its own registration and compliance requirements

I have invested ₹25 lakh as an NRI Canadian citizen in Indian mutual funds from 2014 till date. I am a taxpayer in Canada and I have stated it while filling up the additional KYC/FATCA declaration. What will happen to my investments now? Will AMCs liquidate my funds?
- Anant

At the moment, Indian mutual funds are not entertaining Canadian citizens due to compliance issues. As per the Canadian law, foreign issuers can only privately place securities to accredited investors. Mutual funds being in the nature of public funds cannot be privately placed. Offering of funds to retail investors involves a cumbersome registration procedure - each province in Canada specifies its own registration and compliance requirements. Further, accepting investments from Canadian residents is treated as offering even though there is no active marketing in such jurisdiction. These are the reasons why mutual funds are shying away from accepting investments from Canadian citizens.

The AMC will not liquidate your investments. Since you have disclosed your Canadian citizenship while filling up the additional KYC/FATCA form, your fund house may get in touch with you and tell you about the future course of action needs to be taken. You can wait for that or liquidate your investments now. Please figure out the reporting/taxation requirements in Canada before taking a final decision.

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