Description

ICICI Prudential Mutual Fund discontinues existing SIP and STP registrations in Global Advantage Fund (FOF) effective February 5, 2026, following SEBI's grandfathering framework for FOF schemes.

Summary

ICICI Prudential Mutual Fund has announced the temporary discontinuation of existing Systematic Investment Plans (SIP) and Systematic Transfer Plans (STP) in the ICICI Prudential Global Advantage Fund (FOF) effective February 5, 2026. This action follows SEBI’s Framework for launching Fund of Fund schemes with multiple underlying funds, issued via letter to AMFI dated February 6, 2025, and SEBI’s subsequent permission for grandfathering dated January 20, 2026. The scheme will be grandfathered as it cannot be classified under any of the categories specified under the new framework, and must be merged or wound up within 3 years from January 20, 2026.

Key Points

  • Existing SIP and STP IN registrations (including IDCW reinvestment option) will be discontinued from February 5, 2026
  • IDCW reinvestment option will be changed to IDCW Payout
  • Fresh subscriptions (lump sum, switch-in, new SIP/STP registrations) were already discontinued since August 13, 2024
  • Redemptions, switch-outs, existing STP-Out, and SWP will continue unaffected
  • The scheme has been grandfathered effective January 27, 2026
  • The scheme must be merged and/or wound up within 3 years from January 20, 2026 (by January 20, 2029)
  • All other scheme features remain unchanged

Regulatory Changes

SEBI introduced a new Framework for launching Fund of Fund (FOF) schemes with multiple underlying funds via letter to AMFI dated February 6, 2025. The ICICI Prudential Global Advantage Fund (FOF), with its existing asset allocation and investment objective, could not be classified under any of the categories specified under this framework. Consequently, SEBI granted permission for grandfathering of this scheme through a letter dated January 20, 2026, allowing it to continue operations under specific restrictions until eventual merger or winding up.

Compliance Requirements

For ICICI Prudential Mutual Fund:

  • Discontinue all existing SIP and STP IN registrations with effect from February 5, 2026
  • Convert IDCW reinvestment option to IDCW Payout
  • Continue to adhere to applicable regulatory guidelines and provisions of SID and KIM
  • Merge and/or wind up the scheme within 3 years from January 20, 2026

For Investors:

  • Existing SIP/STP investors need to make alternative investment arrangements if they wish to continue systematic investments
  • Investors with IDCW reinvestment option should note the change to payout mode
  • Periodically review and update KYC details including mobile number and email ID

For NSE MF Invest Platform:

  • Disable SIP and STP registration facilities for this scheme as communicated by the AMC

Important Dates

  • August 13, 2024: Fresh subscriptions (lump sum, switch-in, new SIP/STP) discontinued
  • January 20, 2026: SEBI granted grandfathering permission
  • January 22, 2026: Notice issued by ICICI Prudential AMC
  • January 27, 2026: Scheme grandfathering effective date
  • February 4, 2026: NSE circular issued
  • February 5, 2026: Existing SIP and STP registrations discontinued; IDCW reinvestment changed to payout
  • January 20, 2029: Deadline for scheme merger/winding up (3 years from grandfathering permission)

Impact Assessment

Investor Impact: Existing investors with active SIP or STP arrangements will experience disruption to their systematic investment plans. They will need to either redeem their investments or continue holding without additional systematic contributions. Investors relying on IDCW reinvestment for compounding will receive payouts instead, requiring manual reinvestment if desired.

Market Impact: Limited market-wide impact as this affects only one specific FOF scheme. However, it signals SEBI’s stricter categorization requirements for FOF schemes industry-wide.

Operational Impact: The scheme will operate in a run-off mode with no fresh inflows except through existing SWP/STP-out arrangements. The AMC must plan for orderly merger or winding up within the 3-year timeframe, which may involve identifying suitable target schemes for merger or executing a complete exit strategy.

Platform Impact: NSE MF Invest Platform has disabled relevant transaction facilities to ensure compliance with the AMC’s restrictions.

Impact Justification

Affects existing investors in ICICI Prudential Global Advantage FOF who have active SIP/STP arrangements, requiring them to adjust investment plans. Limited to one specific scheme but has direct operational impact on those investors.