Simplification of Offer Document and Key Information Memorandum of Mutual Funds Scheme
Summary
This section outlines the mandatory disclosures and structural requirements for a Mutual Fund Scheme Information Document, including risk factors and minimum investor norms. It establishes that the document must be read in conjunction with the Statement of Additional Information and clarifies SEBI's non-approval status of the scheme details. Specific provisions mandate minimum investor counts and concentration limits to ensure diversification and prevent undue influence by single investors. This section mandates the uniform use of defined terms and requires the Asset Management Company to submit a due diligence certificate confirming regulatory compliance. It outlines specific disclosure requirements for scheme type, investment objectives, asset allocation, and strategies, including rules for assured return schemes. Additionally, it details procedures for changing fundamental attributes, benchmarking performance, disclosing fund manager details, and reporting historical returns. This section outlines the procedural details for New Fund Offers, including pricing, minimum targets, and refund mechanisms. It specifies the ongoing offer mechanics such as NAV-based pricing with entry and
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The units being offered for public subscription have not been approved or recommended by SEBI nor has SEBI certified the accuracy or adequacy of the Scheme Information Document.
SAI is incorporated by reference (is legally a part of the Scheme Information Document). The Scheme Information Document should be read in conjunction with the SAI and not in isolation.
A Mutual Fund is free to add any other disclosure, which in the opinion of the Trustees... or the Asset Management Company (AMC) is material for the investor, provided that such information is not presented in an incomplete, inaccurate or misleading manner.
Care should therefore be taken to present the information in the Scheme Information Document in simple language and in a clear, concise and easily understandable manner.
The scheme shall not have a name or title which may be deceptive or misleading. Scheme’s name should be consistent with its statement of investment policy.
Highlights/summary of the scheme... shall make a specific disclosure in case of assured return schemes regarding the guarantee given either by the AMC or by the Sponsor to distribute income at the assured rate, and to redeem the capital invested, to the unit holder. This statement shall be in bold, legible fonts.
Investment in Mutual Fund Units involves investment risks such as trading volumes, settlement risk, liquidity risk, default risk including the possible loss of principal.
Past performance of the Sponsor/AMC/Mutual Fund does not guarantee future performance of the scheme.
The sponsor is not responsible or liable for any loss resulting from the operation of the scheme beyond the initial contribution of _____ made by it towards setting up the Fund.
The Scheme/Plan shall have a minimum of 20 investors and no single investor shall account for more than 25% of the corpus of the Scheme/Plan(s).
In case the Scheme / Plan(s) does not have a minimum of 20 investors in the stipulated period, the provisions of Regulation 39(2)(c) of the SEBI (MF) Regulations would become applicable automatically without any reference from SEBI and accordingly the Scheme / Plan(s) shall be wound up and the units would be redeemed at applicable NAV.
Failure on the part of the said investor to redeem his exposure over the 25 % limit within the aforesaid 15 days would lead to automatic redemption by the Mutual Fund on the applicable Net Asset Value on the 15th day of the notice period.
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Source: SecMarx — Simplification of Offer Document and Key Information Memorandum of Mutual Funds Scheme. Verbatim text is public record; SecMarx structuring (linkage to applying orders) is cited to us.