Regulatory Guidance Triggers Temporary Ban on New Gold ETF FoF SIPs

In response to recent regulatory consultations, several mutual fund houses have issued a temporary prohibition on fresh Systematic Investment Plan (SIP) registrations for Gold ETF Fund‑of‑Funds. The restriction also covers lump‑sum investments, top‑up contributions under existing SIPs, and new Systematic Transfer Plan (STP) registrations. Some firms have further extended the freeze to switch‑in transactions. The notice assures investors that the suspension is only until a new directive is issued and that all SIP and STP instalments already on record will be processed without interruption. Redemption and switch‑out requests will continue to be honoured. One house warned that applications received after the Thursday cut‑off time could be rejected and refunded. While the exact rationale behind the ban was not disclosed, the timing aligns with the pre‑Diwali period, a time when gold demand typically accelerates, putting additional strain on India's import‑driven gold market and the rupee.