Description

ICICI Prudential Mutual Fund temporarily discontinues fresh subscriptions in Silver ETF Fund of Fund due to inflated domestic silver prices and supply constraints.

Summary

National Stock Exchange has notified that ICICI Prudential Mutual Fund has temporarily suspended fresh subscriptions in ICICI Prudential Silver ETF Fund of Fund with immediate effect from October 14, 2025. The suspension applies to lump sum investments, switches, and new SIP/STP registrations. The decision is driven by significantly inflated domestic silver prices above global benchmarks due to local supply shortages, which impacts the fund’s ability to invest at fair valuations. Existing SIPs/STPs registered before October 14, 2025 will continue, and all redemptions remain operational.

Key Points

  • Temporary suspension of fresh subscriptions in ICICI Prudential Silver ETF Fund of Fund effective October 14, 2025
  • Suspension covers lump sum investments, switches, and new SIP/STP registrations
  • Existing SIPs and STPs registered prior to October 14, 2025 will continue to be processed
  • Redemptions, Systematic Withdrawal Plans (SWP), switch-out, and STP-out remain operational without restrictions
  • Silver ETF FOF invests in ICICI Prudential Silver ETF, which tracks physical silver performance in domestic prices
  • Domestic silver prices have risen significantly above global benchmarks due to local supply shortages
  • Premium in Indian silver prices attributed to supply constraints in the bullion market
  • Supply shortage expected to continue in near future, impacting fresh investments
  • Measure implemented to protect investor interests from inflated pricing

Regulatory Changes

No regulatory framework changes. This is an operational decision by ICICI Prudential Mutual Fund approved by ICICI Prudential Trust Limited to temporarily restrict new subscriptions in the affected scheme.

Compliance Requirements

  • NSE members must disable the ICICI Prudential Silver ETF Fund of Fund scheme for fresh subscriptions, SIPs, STPs, and lump sum investments on NSE MF Invest Platform
  • Members must ensure existing SIPs and STPs continue to operate
  • Redemption and withdrawal facilities must remain unrestricted
  • Notice cum addendum issued to update Scheme Information Document and Key Information Memorandum

Important Dates

  • October 14, 2025: Effective date for temporary suspension of fresh subscriptions
  • October 14, 2025: Cut-off date - existing SIPs/STPs registered before this date will continue
  • Until further notice: Duration of the suspension (no specific end date provided)

Impact Assessment

Market Impact: Limited to new investors seeking exposure to silver through this specific fund of fund scheme. Does not affect the broader silver ETF market or other mutual fund schemes.

Investor Impact: New investors cannot enter the scheme through fresh investments, protecting them from potentially unfavorable entry points due to inflated domestic silver prices. Existing investors retain full flexibility for redemptions and withdrawals.

Operational Impact: The suspension prevents the fund from making fresh investments in the underlying Silver ETF at inflated valuations, protecting the scheme’s overall performance and existing investor interests. The supply constraint issue in the domestic bullion market is expected to persist, suggesting the suspension may continue for an extended period.

Rationale: The significant premium of Indian silver prices over global benchmarks, caused by supply constraints in the domestic bullion market, creates an unfavorable investment environment. The closing price of ETF units on the exchange (used for FOF valuation) reflects these inflated prices, making fresh investments potentially detrimental to investor returns.

Impact Justification

Affects only new investors in a specific mutual fund scheme; existing investments and redemptions unaffected. Temporary measure due to market conditions.