The directive came after a brief meeting with SEBI officials, who warned that gold exposure had reached a tipping point amid rising market volatility.
Tata Mutual Fund, the largest player in the segment, said it would impose a temporary ban on new lump‑sum, SIP and STP registrations for its Tata Gold ETF FoF from Oct 16, 2026, while allowing existing commitments to roll through.
Industry insiders note that FoFs contribute about one‑third of the ₹1.7 lakh crore gold ETF market, roughly 2% of the overall mutual‑fund AUM, so the blow is limited.
The ban follows a recent 15% increase in import duty on gold, up from 7–8%, as part of the government's strategy to protect foreign‑exchange reserves.
SEBI will monitor market response and is expected to lift the restriction once the temporary measures prove ineffective, with fund houses slated to resume normal inflows thereafter.