Description

ICICI Prudential Passive Multi-Asset Fund of Funds to be grandfathered effective January 27, 2026, with subscription discontinued and scheme to be merged or wound up within 3 years.

Summary

ICICI Prudential Asset Management Company has announced the grandfathering of ICICI Prudential Passive Multi-Asset Fund of Funds effective January 27, 2026, pursuant to SEBI’s Framework for launching Fund of Fund schemes with multiple underlying funds. The scheme will no longer accept new subscriptions through lump sum, fresh SIP, or STP from January 27, 2026. All existing SIPs, STPs, and IDCW reinvestment options will be discontinued from February 5, 2026. The scheme must be merged or wound up within 3 years from January 20, 2026, as it cannot be classified under any category specified in the new framework.

Key Points

  • Scheme grandfathered effective January 27, 2026 due to non-compliance with SEBI’s new FOF framework
  • No new subscriptions accepted via lump sum, fresh SIP, or STP from January 27, 2026
  • Purchase or switch-in transactions timestamped on or before 3:00 PM of January 23, 2026 will be processed at applicable NAV
  • Existing SIPs, STPs, and IDCW reinvestment options discontinued from February 5, 2026
  • IDCW reinvestment option changed to IDCW Payout
  • Redemptions, switch-outs, existing STP-Out, and SWP continue without impact
  • Scheme must be merged or wound up within 3 years from January 20, 2026 (by January 20, 2029)
  • All other scheme features remain unchanged
  • Scheme continues to adhere to applicable regulatory guidelines, SID, and KIM provisions

Regulatory Changes

This action is implemented pursuant to:

  • SEBI’s letter to AMFI dated February 6, 2025 on ‘Framework for launching of Fund of Fund (FOF) schemes with multiple underlying Funds’
  • SEBI’s letter dated January 20, 2026 permitting grandfathering of the scheme
  • The scheme’s existing asset allocation and investment objective could not be classified under any categories specified under the new framework, necessitating grandfathering

Compliance Requirements

For Asset Management Company:

  • Discontinue all fresh subscriptions (lump sum, SIP, STP) from January 27, 2026
  • Process all purchase/switch-in transactions timestamped on or before 3:00 PM of January 23, 2026
  • Discontinue all existing SIPs, STPs, and IDCW reinvestment facilities from February 5, 2026
  • Convert IDCW reinvestment option to IDCW Payout
  • Continue processing redemptions and switch-outs without restrictions
  • Merge or wind up the scheme within 3 years from January 20, 2026
  • Continue adhering to applicable regulatory guidelines, SID, and KIM provisions

For Investors:

  • No fresh investments possible after January 27, 2026
  • Existing SIPs and STPs will be automatically discontinued from February 5, 2026
  • Redemptions and switch-outs remain available without restrictions
  • Review investment strategy considering mandatory scheme closure by January 20, 2029

Important Dates

  • January 22, 2026: Notice date (Notice No. 012/01/2026)
  • January 23, 2026, 3:00 PM: Last timestamp for purchase/switch-in transactions to be accepted
  • January 27, 2026: Grandfathering effective date; subscription discontinuation effective date
  • February 5, 2026: Existing SIPs, STPs, and IDCW reinvestment options discontinued
  • January 20, 2029: Deadline for scheme merger or wind-up (3 years from January 20, 2026)

Impact Assessment

Investor Impact:

  • High impact on investors planning fresh investments or additional contributions through SIP/STP
  • Existing investors can continue holding units but should plan exit strategy before mandatory merger/wind-up by January 20, 2029
  • Automatic conversion of IDCW reinvestment to payout may affect investors’ reinvestment strategies
  • No impact on redemption flexibility

Market Impact:

  • Reflects broader regulatory changes to FOF schemes under SEBI’s new framework
  • Signals tightening of FOF scheme classifications and investment mandates
  • May lead to similar grandfathering or restructuring of other FOF schemes that don’t fit new categories

Operational Impact:

  • AMC must manage scheme wind-down over 3-year period
  • Investors need to reassess portfolio allocation and consider alternative investment options
  • Distributors and advisors must communicate changes to affected clients

Impact Justification

High importance due to mandatory scheme grandfathering affecting all existing investors, with complete subscription discontinuation and mandatory merger/wind-up within 3 years per SEBI framework.