Description

NSE informs members of temporary restrictions on maximum subscription limits for Franklin India Asian Equity Fund and Franklin U.S. Opportunities Equity Active Fund of Funds, effective May 18, 2026, to comply with SEBI overseas investment limits.

Summary

NSE has informed its members of temporary restrictions on maximum subscription amounts for two Franklin Templeton Mutual Fund schemes on the NSE MF Invest Platform, effective May 18, 2026. The restriction is imposed to prevent breach of industry-wide overseas investment limits mandated by SEBI under Para 13.11 of the SEBI Master Circular for Mutual Funds dated March 20, 2026.

Key Points

  • Restriction applies to Franklin India Asian Equity Fund and Franklin U.S. Opportunities Equity Active Fund of Funds
  • Lump sum purchases, additional purchases, and switch-ins are capped at ₹5,00,000 per PAN per month (first holder/Guardian)
  • Fresh SIP and STP registrations are capped at ₹50,000 per PAN per month (first holder/Guardian)
  • Transactions exceeding these limits will be fully rejected and refunded; partial amounts will not be accepted
  • Existing SIP/STP registrations made before May 18, 2026 are not affected
  • IDCW Reinvestment Option unitholders are not affected
  • Total overseas investment across all Franklin Templeton schemes is capped at the level as of February 1, 2022

Regulatory Changes

The restriction is imposed in compliance with SEBI’s overseas investment limits as outlined in the SEBI Master Circular for Mutual Funds (March 20, 2026), specifically Para 13.11. Franklin Templeton Asset Management (India) Pvt. Ltd. issued an addendum dated May 15, 2026 modifying the Scheme Information Documents and Key Information Memorandums of the affected schemes.

Compliance Requirements

  • NSE members on the MF Invest Platform must ensure no transaction for the affected schemes exceeds the prescribed monthly limits per PAN
  • Members should communicate these restrictions to their clients investing in Franklin India Asian Equity Fund and Franklin U.S. Opportunities Equity Active Fund of Funds
  • Any transaction breaching the cap must be rejected in full; partial processing is not permitted
  • Members should note that all other terms and conditions of the scheme SIDs/KIMs remain unchanged

Important Dates

  • May 15, 2026: Date of Franklin Templeton addendum
  • May 18, 2026: Effective date of subscription restrictions (immediate effect)
  • February 1, 2022: Reference date for the overseas investment cap applicable across all Franklin Templeton schemes

Impact Assessment

The restrictions are moderate in impact, primarily affecting retail and HNI investors seeking to make large lump sum investments or set up high-value SIPs in these two overseas-focused Franklin Templeton funds. Investors already enrolled in SIP/STP plans prior to May 18, 2026 face no disruption. The cap is a precautionary measure to stay within SEBI’s industry-wide overseas investment ceiling and is described as temporary. Market members on NSE MF Invest Platform need to update their systems to enforce these limits and manage client expectations accordingly.

Impact Justification

Affects investors in two specific Franklin Templeton overseas-oriented schemes by capping monthly investment amounts; does not halt investments entirely but limits new capital flows due to SEBI's industry-wide overseas investment ceiling.