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TMI BlogCategorization and Rationalization of Mutual Fund SchemesX X X X Extracts X X X X X X X X Extracts X X X X ..... (Uniform Description of Schemes): 3. The Schemes would be broadly classified in the following groups: a. Equity Schemes b. Debt Schemes c. Hybrid Schemes d. Solution Oriented Schemes e. Other Schemes The details of the scheme categories under each of the aforesaid groups along with their characteristics and uniform description are given in the Annexure. 4. As per the annexure, the existing 'type of scheme' (presently mentioned below the scheme name in the offer documents/ advertisements/ marketing material/etc) would be replaced with the type of scheme (given in the third column of the tables in the Annexure) as applicable to each category of scheme. This will enhance the existing disclosure. Hence, for the purpose of alignment of the existing schemes with the provisions of this circular, change in "type of scheme" alone, would not be considered as a change in fundamental attribute. 5. In case of Solution oriented schemes, there will be specified period of lock in as stated in the Annexure. However, the said lock- in period would not be applicable to any existing investment by an investor, registered SIPs and incoming STPs in the existing solution oriented schemes a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... action (viz., winding up, merger, fundamental attribute change etc.) in respect of the existing similar schemes as well as those that are not in alignment to the categories stated herein. d. Subsequent to the observations issued by SEBI on the proposals, Mutual Funds would have to carry out the necessary changes in all respects within a maximum period of 3 months from the date of such observation. e. Where there is a merger of schemes/change of fundamental attribute(s) of a scheme (as laid down under SEBI Circular No. IIMARP/MF/CIR/01/294/98 dated February 4, 1998), the AMCs would be required to comply with Regulation 18 (15A) of SEBI (Mutual Funds Regulation, 1996). f. Mutual Funds are advised to strictly adhere to the scheme characteristics stated herein as well as to the spirit of this circular. Mutual Funds must ensure that the schemes so devised should not result in duplication/minor modifications of other schemes offered by them. The decision of SEBI in this regard shall be binding on all the mutual funds. IV. Applicability of this circular: a. All existing open ended schemes of all Mutual Funds b. All such open ended schemes where SEBI has issued final observati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tegy Contra Fund* Scheme should follow a contrarian investment strategy. Minimum investment in equity & equity related instruments - 65% of total assets An open ended equity scheme following contrarian investment strategy 8 Focused Fund A scheme focused on the number of stocks (maximum 30) Minimum investment in equity & equity related instruments - 65% of total assets An open ended equity scheme investing in maximum 30 stocks (mention where the scheme intends to focus, viz., multi cap, large cap, mid cap, small cap) 9 Sectoral/ Thematic Minimum investment in equity & equity related instruments of a particular sector/ particular theme- 80% of total assets An open ended equity scheme investing in __ sector (mention the sector)/ An open ended equity scheme following __ theme (mention the theme) 10 ELSS Minimum investment in equity & equity related instruments - 80% of total assets (in accordance with Equity Linked Saving Scheme, 2005 notified by Ministry of Finance) An open ended equity linked saving scheme with a statutory lock in of 3 years and tax benefit * Mutual Funds will be permitted to offer either Value fund or Contra fund. B. Debt Schemes Sr. No. Cate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bond Fund Minimum investment in corporate bonds- 80% of total assets (only in highest rated instruments) An open ended debt scheme predominantly investing in highest rated corporate bonds 12 Credit Risk Fund^ Minimum investment in corporate bonds- 65% of total assets (investment in below highest rated instruments) An open ended debt scheme investing in below highest rated corporate bonds 13 Banking and PSU Fund Minimum investment in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions- 80% of total assets An open ended debt scheme predominantly investing in Debt instruments of banks, Public Sector Undertakings, Public Financial Institutions 14 Gilt Fund Minimum investment in Gsecs- 80% of total assets (across maturity) An open ended debt scheme investing in government securities across maturity 15 Gilt Fund with 10 year constant duration Minimum investment in Gsecs- 80% of total assets such that the Macaulay duration of the portfolio is equal to 10 years An open ended debt scheme investing in government securities having a constant maturity of 10 years 16 Floater Fund Minimum investment in floating rate instruments- 65% of total ..... 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