Description

Edelweiss Mutual Fund discontinues new lump sum investments and switch-ins for 7 offshore schemes effective October 16, 2025, and caps new SIP/STP at INR 5,000 per PAN per day due to nearing overseas investment headroom limits.

Summary

Edelweiss Asset Management Limited has announced significant restrictions on subscriptions for seven offshore schemes effective October 16, 2025. The AMC’s available headroom for overseas investment as per the mutual fund level limit set on February 1, 2022 is nearing its threshold. New lump sum investments and switch-ins will be completely discontinued, while new systematic transactions (SIP/STP) will be capped at maximum INR 5,000 per PAN per day. This action follows SEBI’s clarification dated June 17, 2022 regarding overseas investment limits. Existing systematic transactions remain unaffected.

Key Points

  • New lump sum investments discontinued for 7 Edelweiss offshore schemes from October 16, 2025
  • New switch-ins to these schemes also discontinued from the effective date
  • New monthly SIP and STP capped at maximum INR 5,000 per PAN per day
  • Restriction based on transaction reporting date
  • Transactions reported till October 15, 2025 before cut-off time will not be subject to restrictions
  • Existing systematic transactions (SIPs/STPs) will continue unaffected
  • Action taken due to nearing of overseas investment headroom limits per February 1, 2022 threshold
  • Based on SEBI letter no. SEBI/HO/OW/IMD-II/DOF3/25095/2022 dated June 17, 2022

Affected Schemes

  1. Edelweiss ASEAN Equity Off-shore Fund
  2. Edelweiss Greater China Equity Off-shore Fund
  3. Edelweiss US Technology Equity Fund of Fund
  4. Edelweiss Emerging Markets Opportunities Equity Offshore Fund
  5. Edelweiss Europe Dynamic Equity Offshore Fund
  6. Edelweiss US Value Equity Off-shore Fund
  7. Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund

Regulatory Changes

This notice cum addendum updates the Scheme Information Document (SID) and Key Information Memorandum (KIM) of the designated schemes. The restrictions are implemented pursuant to SEBI’s clarification that mutual funds can resume subscriptions and make investments in overseas funds/securities up to headroom available without breaching the overseas investment limits as of February 1, 2022 at mutual fund level. The addendum forms an integral part of the SID/KIM/SAI and overrides any conflicting provisions.

Compliance Requirements

  • Investors must comply with the INR 5,000 per PAN per day limit for new SIP/STP registrations
  • No new lump sum investments or switch-ins permitted in the 7 designated schemes
  • AMC will update relevant sections of SID/KIM documents
  • Restrictions apply based on transaction reporting date

Important Dates

  • October 16, 2025: Effective date for subscription restrictions
  • October 15, 2025: Last date for transactions (before cut-off time) to be exempt from restrictions
  • October 13, 2025: Notice date
  • August 13, 2025: Previous notice cum addendum regarding subscription limits
  • June 17, 2022: SEBI clarification letter date
  • February 1, 2022: Reference date for overseas investment limit calculation

Impact Assessment

Investor Impact (High): Investors looking to make fresh investments in these offshore schemes face severe restrictions. New investors cannot make lump sum investments, and those preferring systematic investments are limited to INR 5,000 per PAN per day, significantly constraining investment options for offshore exposure through these schemes.

Market Impact (Medium): The restriction indicates broader pressure on industry-wide overseas investment limits. Other AMCs may face similar constraints if their overseas investment headroom approaches regulatory thresholds.

Operational Impact (Medium): Existing SIP/STP investors are protected, but distribution channels and platforms must implement controls to enforce the INR 5,000 daily limit for new systematic plans and block new lump sum subscriptions and switch-ins.

Portfolio Impact (High): Investors seeking international diversification through these specific Edelweiss schemes must explore alternative funds or AMCs with available overseas investment headroom, potentially disrupting planned asset allocation strategies.

Impact Justification

Immediate impact on investors seeking to invest in 7 Edelweiss offshore schemes with complete discontinuation of new lump sum investments and significant restrictions on systematic investments, affecting investment access and portfolio planning.