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The Securities and Exchange Board of India has simplified and rationalised the format of offer documents for mutual funds. The move is expected to increase readability and understanding for MF investors.

The revamped format is aimed at streamlining the giving out relevant information to investors, rationalising the preparation of scheme information and facilitating its periodic updation by mutual funds.

The updated format will implemented with effect from April 1, 2024, Sebi said in a circular.
The decision to revamp the format was taken after the recommendations of industry body AMFI and the recommendations of Sebi’s Mutual Fund Advisory Committee.

To give effect to the revisions in the scheme document, the regulator has modified several provisions.  Under the modification, the scheme’s portfolio holdings —  top 10 holdings by the issuer and fund allocation toward various sectors — will be disclosed by way of a functional web link where such data will be hosted.

Also, certain disclosures about the aggregate investment in the scheme by AMC’s board of directors and other key personnel, will be provided in the Statement of Additional Information (SAI) of the MF scheme.

“Creation of segregated portfolio shall be optional and at the discretion of the AMC. It should be created only if the SID of the scheme has enabling provision for a segregated portfolio with detailed disclosures made in SAI,” Sebi said.   “All new schemes shall have the enabling provision included in the SID for the creation of a segregated portfolio,” it said.

Further, Asset Management Companies (AMCs) will have to disclose the risk-o-meter of the benchmark on the front page of the initial offering application form, SID and Key Information Memorandum (KIM), and common application form, along with the information about the scheme.  In line with the new SID format, Sebi asked AMFI to carry out the necessary changes in the formats of KIM and SAI in consultation with it, within two months.