A critical regulatory threshold has been breached, with twelve international mutual funds stopping fresh SIP registrations this week after hitting the RBI's foreign investment cap. The crisis began when PGIM closed its three funds and Franklin its two on July 9, 2026, while Edelweiss closes its six funds today (July 10, 2026). This leaves exactly one fund open to both fresh SIPs and lump sum investments: Baroda BNP Paribas Aqua FoF. The RBI allows the mutual fund industry to hold $7 billion in foreign securities, plus a separate $1 billion for overseas ETFs, with a $1 billion ceiling per fund house. Since the industry breached the securities limit in January 2022, each fund house may invest abroad only up to the headroom it held on February 1, 2022, which has remained frozen for four and a half years. As reported by Mint, fresh SIP registrations into international mutual funds have nearly come to a halt after PGIM, Franklin Templeton and Edelweiss suspended new inflows into a total of 11 overseas schemes this week due to regulatory investment limits.
Edelweiss Mutual Fund has announced the temporary suspension of fresh SIP and STP subscriptions in its global funds, effective July 10, 2026. According to reports from Mint, this suspension affects seven specific global fund categories that the asset management company offers to investors. The fund house stated that fresh SIP and STP registrations will not be accepted after the cut-off time on July 10, 2026, while existing SIP and STP instalments continue without interruption. In October 2025, the fund house had already stopped lumpsum investment in these funds and capped SIP and STP at ₹5,000 per PAN per month. The suspension is specifically due to SEBI's overseas investment caps, as reported by Mint, ensuring adherence to the Securities and Exchange Board of India's regulatory framework. Existing SIPs continue in every case, with the suspension affecting only new registration capabilities.
The suspension covers seven specific global fund categories that Edelweiss offers to investors: Edelweiss ASEAN Equity Offshore Fund, Edelweiss Greater China Equity Offshore Fund, Edelweiss US Technology Equity FoF, Edelweiss Emerging Markets Opportunities Equity Offshore Fund, Edelweiss Europe Dynamic Equity Offshore Fund, Edelweiss US Value Equity Offshore Fund, and Edelweiss MSCI India Domestic & World Healthcare 45 Index Fund. As reported by Value Research, these funds are part of the company's global investment offerings that have been temporarily closed to new SIP subscriptions. The affected funds show varied performance metrics, with PGIM India Global Equity Opportunities FoF delivering 19.2% CAGR over 1 year, 18.9% over 3 years, and 8.1% over 5 years in the growth plan. PGIM India Emerging Markets Equity FOF demonstrated strong performance with 36.0% CAGR over 1 year, 26.5% over 3 years, and 3.2% over 5 years. PGIM India Global Select Real Estate Securities FoF showed 26.6% CAGR over 1 year, 16.0% over 3 years, and NA over 5 years.
The restrictions are not linked to fund performance but stem from the overseas investment limits prescribed by the Reserve Bank of India, as reported by Mint. Edelweiss specifically stated that the move was necessitated because its available overseas investment headroom was nearing the permitted threshold. PGIM and Franklin also cited the overseas investment cap while announcing the restrictions. Existing SIPs and STPs will continue without any interruption, with the restriction applying only to new SIP registrations, fresh STPs and, in most cases, fresh lump sum investments. As reported by Mint, the latest closures do not affect investors who already have SIPs running in these schemes, as their existing instalments will continue to be processed as before. The shrinking list of available funds means choices have become increasingly limited unless regulators revise the overseas investment limits or fund houses regain investment headroom through redemptions or changes in overseas exposure.
