ICICI Prudential Mutual Fund suspends new investments in overseas schemes due to SEBI and AMFI limits

From August 13, 2024, ICICI Prudential Mutual Fund has decided to stop availing more investments for its various schemes that deal with overseas investments. The decision emerged in respect of SEBI and AMFI’s industry-wide cap on foreign asset investments. The affected schemes include:

1. ICICI Prudential US Bluechip Equity Fund
2. ICICI Prudential Global Stable Equity Fund (FOF)
3. ICICI Prudential Global Advantage Fund (FOF)
4. ICICI Prudential Nasdaq 100 Index Fund
5. ICICI Prudential Strategic Metal and Energy Equity Fund of Funds

Existing systematic investments, such as Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs), will continue as usual. The AMC will review the situation and may reopen subscriptions if new limits are set or clarifications are issued by SEBI/AMFI.

Suspension is temporary

The suspension of new investments is only temporary. The fund house will reassess the situation based on the increase in available capacity without exceeding the overseas investment limits set by regulators or any changes in these limits.

The RBI has established an industry-wide cap of $7 billion for investments in international entities through mutual fund schemes, with an additional $1 billion allocated for investments via ETFs. In January 2022, SEBI stopped new investments in international mutual fund schemes to prevent exceeding these limits.

However, in June 2022, SEBI allowed mutual funds to resume accepting investments in international schemes as long as they remained within the established limits. Since then, mutual funds have been managing their acceptance of international investments based on the available capacity.

Conclusion

The temporary suspension by ICICI Prudential is a precautionary measure in response to regulatory limits. The fund house will review and potentially reopen investments once capacity or limits are reassessed.