The restriction applies to the Franklin Asian Equity Fund and the Franklin US Opportunities Equity Active Fund of Fund (FoF).
The fund house clarified that the suspension is limited to fresh SIP and STP registrations. Existing SIPs and STPs registered before July 9 will continue without any change.
What has changed?
Investors will not be able to register new SIPs or STPs in the two schemes until further notice. Existing systematic investments and holdings in the schemes remain unaffected.
Why has Franklin Templeton taken this step?
While the fund house did not specify the reason in its notice, such restrictions are typically imposed by asset management companies offering international funds when they are nearing the overseas investment headroom available under industry-wide limits.
The mutual fund industry’s overseas investment limits have remained in place since February 2022. As fund houses approach their available allocation, they often temporarily restrict fresh inflows into international schemes while allowing existing SIPs and STPs to continue.
In a similar move, Edelweiss Mutual Fund also announced a similar restriction on fresh subscriptions, including new SIPs and STPs, in seven overseas-oriented schemes, citing the nearing threshold of its available overseas investment headroom under the mutual fund-level limits.
Franklin Templeton has not indicated when fresh SIP and STP registrations in these schemes will resume. Until then, only new systematic investment registrations remain suspended, while existing investments continue to be serviced as usual.
