Description

Edelweiss Mutual Fund discontinues new lump sum investments and switch-ins in 7 designated schemes with overseas exposure effective October 16, 2025, while capping new SIPs and STPs at INR 5,000 per PAN per day due to nearing overseas investment headroom limits.

Summary

Edelweiss Mutual Fund has imposed strict subscription limits on 7 designated schemes with overseas investment exposure, effective October 16, 2025. The restrictions include complete discontinuation of new lump sum investments and switch-ins, while new Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs) will be capped at a maximum of INR 5,000 per PAN per day. This action is taken as the AMC’s available headroom for overseas investment is nearing its threshold under the mutual fund level limit set on February 1, 2022, as per SEBI guidelines. Existing systematic transactions remain unaffected.

Key Points

  • New lump sum investments discontinued in 7 Edelweiss schemes effective October 16, 2025
  • Switch-ins to the designated schemes will not be permitted from the effective date
  • New SIPs and STPs capped at maximum INR 5,000 per PAN per day
  • Restrictions apply based on transaction reporting date
  • Transactions reported till October 15, 2025 before cut-off time will not be subject to these limits
  • Existing systematic transactions (SIPs/STPs) remain unaffected and will continue normally
  • Restrictions due to AMC’s overseas investment headroom nearing threshold limits set on February 1, 2022
  • Applies to schemes with overseas fund/securities investments

Affected Schemes

The following 7 schemes of Edelweiss Mutual Fund are subject to the new subscription limits:

  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 action is pursuant to SEBI letter no. SEBI/HO/OW/IMD-II/DOF3/25095/2022 dated June 17, 2022, which clarified that mutual funds can resume subscriptions and make investments in overseas fund/securities up to the headroom available without breaching the overseas investment limits as of February 1, 2022 at the mutual fund level. As Edelweiss Mutual Fund’s available headroom is nearing this threshold, these restrictions have been imposed to maintain compliance with overseas investment limits.

Compliance Requirements

  • Investors must adhere to the INR 5,000 per PAN per day limit for new SIPs and STPs in the designated schemes
  • No new lump sum investments or switch-ins will be accepted in the 7 designated schemes from October 16, 2025
  • AMC will update the Scheme Information Document (SID), Key Information Memorandum (KIM), and Statement of Additional Information (SAI) to reflect these changes
  • The notice cum addendum forms an integral part of the SID/KIM/SAI and overrides conflicting provisions

Important Dates

  • October 13, 2025: Date of notice cum addendum issued by Edelweiss Asset Management Limited
  • October 15, 2025: Last date for transactions (before cut-off time) to be exempt from new restrictions
  • October 16, 2025: Effective date for implementation of subscription limits and restrictions
  • Transaction Reporting Date: Basis for applicability of restrictions

Impact Assessment

Investor Impact: High impact on investors planning to make new investments or increase allocations in these 7 overseas-focused schemes. Investors seeking geographic diversification through international equity exposure will face significant limitations. The INR 5,000 daily cap on new SIPs/STPs may be insufficient for high-net-worth investors or those planning substantial systematic investments.

Market Impact: Reflects broader challenges faced by Indian mutual funds in managing overseas investment limits imposed by SEBI. This may lead to similar restrictions by other fund houses approaching their overseas investment headroom limits, potentially affecting investor access to international equity markets through the mutual fund route.

Operational Impact: Existing investors with ongoing SIPs/STPs are protected, but new investors or those wanting to increase exposure through these schemes face severe limitations. Switch transactions from other schemes into these 7 schemes are completely blocked, affecting portfolio rebalancing strategies.

Impact Justification

High severity and impact as it significantly restricts investor access to 7 Edelweiss Mutual Fund schemes by discontinuing lump sum investments and capping systematic investments at INR 5,000 per PAN per day, affecting investors with overseas equity exposure preferences.