Description

ICICI Prudential Global Advantage Fund (FOF) will be grandfathered with discontinuation of fresh subscriptions and SIP/STP registrations effective February 5, 2026, with the scheme to be merged or wound up within 3 years from January 20, 2026.

Summary

ICICI Prudential Asset Management Company has announced the grandfathering of ICICI Prudential Global Advantage Fund (FOF) effective January 27, 2026, following SEBI’s framework for Fund of Fund schemes. The scheme could not be classified under any categories specified in the new framework and will be merged or wound up within 3 years from January 20, 2026. All fresh subscriptions, SIPs, and STPs into the scheme will be discontinued from February 5, 2026, while redemptions and switch-outs will continue unaffected.

Key Points

  • Scheme grandfathered effective January 27, 2026 under SEBI’s FOF framework dated February 6, 2025
  • Mandatory merger or winding up within 3 years from January 20, 2026 (by January 20, 2029)
  • All existing SIP and STP-IN registrations discontinued from February 5, 2026
  • IDCW reinvestment option changed to IDCW Payout effective February 5, 2026
  • Fresh subscriptions through lump sum and switch-in already discontinued since August 13, 2024
  • Redemptions, switch-outs, existing STP-Out and SWP will continue without impact
  • Scheme will continue to adhere to regulatory guidelines and existing SID/KIM provisions

Regulatory Changes

This action is pursuant to SEBI’s letter to AMFI dated February 6, 2025, establishing a ‘Framework for launching of Fund of Fund (FOF) schemes with multiple underlying Funds’ and SEBI’s letter dated January 20, 2026, permitting grandfathering of non-compliant schemes. The ICICI Prudential Global Advantage Fund (FOF) with its existing asset allocation and investment objective could not be classified under any categories specified under the new framework, necessitating grandfathering and eventual closure.

Compliance Requirements

  • Asset Management Company must ensure no fresh subscriptions are accepted from February 5, 2026
  • All existing SIP and STP-IN registrations must be discontinued by February 5, 2026
  • IDCW reinvestment options must be converted to IDCW Payout by February 5, 2026
  • Scheme must be merged or wound up within 3 years from January 20, 2026
  • Continue adherence to applicable regulatory guidelines and SID/KIM provisions during grandfathering period
  • Investors should be notified of all changes through proper communication channels

Important Dates

  • February 6, 2025: SEBI issued framework for FOF schemes with multiple underlying funds
  • August 13, 2024: Fresh subscriptions via lump sum and switch-in discontinued
  • January 20, 2026: SEBI permitted grandfathering of the scheme
  • January 22, 2026: Notice issued to investors (Notice No. 011/01/2026)
  • January 27, 2026: Grandfathering effective date
  • February 5, 2026: Discontinuation of existing SIP/STP-IN and conversion of IDCW reinvestment to payout
  • January 20, 2029: Deadline for merger or winding up (3 years from January 20, 2026)

Impact Assessment

Investor Impact (High): Existing investors with active SIPs or STPs must reorganize their investment plans and find alternative investment vehicles. Those relying on systematic investments for rupee-cost averaging will need to establish new arrangements in different schemes. Investors with IDCW reinvestment will see their strategy changed to payout, affecting compounding benefits.

Market Impact (Medium): The grandfathering and eventual closure represents broader industry consolidation under SEBI’s new FOF framework. Other FOF schemes unable to comply with the new categorization may face similar actions, potentially leading to industry-wide restructuring of fund-of-fund offerings.

Operational Impact (High): The AMC must manage the orderly discontinuation of investment facilities while maintaining redemption services, and plan for eventual merger or winding up within the stipulated timeframe. This requires careful portfolio management and investor communication over a 3-year transition period.

Impact Justification

Complete discontinuation of fresh investments and eventual closure of a mutual fund scheme affects all existing and potential investors, requiring immediate action and portfolio rebalancing decisions