SBI Mutual Fund Suspends Fresh Subscriptions to US Equity FoF: Key Details Explained

SBI Mutual Fund has announced the suspension of fresh subscriptions to its international scheme, the SBI International Access – US Equity FoF. This move aims to prevent breaching the industry-wide overseas investment limit set by the Reserve Bank of India (RBI). The fund house informed unitholders about this development through an official notice-cum-addendum.

Effective Date and Scope of Suspension 

The suspension will take effect after the cut-off time on December 26, 2024. From December 27, 2024, subscriptions via lump sum investments, including additional purchases and switch-ins, as well as fresh registrations through Systematic Investment Plans (SIPs) and Systematic Transfer Plans (STPs) for transferring IDCW (Income Distribution cum Capital Withdrawal), will no longer be accepted.

Continuity of Existing Registrations 

The fund house clarified that existing systematic registrations, such as ongoing SIPs, STPs, and IDCW transfers, will continue without interruption until further notice. However, intra-scheme switches between plans and options within the scheme are permitted and remain unaffected by the suspension.

Impact on Terms and Conditions 

While this suspension introduces restrictions on new investments, all other terms and conditions of the scheme remain unchanged. The notice forms an integral part of the Scheme Information Document (SID) and the Key Information Memorandum (KIM), which may be amended periodically.

Reason Behind the Decision 

The decision aligns with RBI’s regulations on overseas investments by mutual funds. It follows a prior notice issued by the fund house addressing restrictions on lump sum subscriptions and systematic investment registrations.

About the Fund 

SBI International Access – US Equity FoF is an open-ended fund of funds scheme. It primarily invests in mutual fund schemes and Exchange Traded Funds (ETFs) focused on the US markets. The investment objective is to achieve long-term capital appreciation by investing in units of overseas funds, particularly those domiciled in the US.

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Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions. 

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully