Mutual Fund Companies Cannot Launch Multiple-Plans for One Scheme : SEBI

Market regulator SEBI asked mutual fund houses to stop launching multiple-plans for one scheme. As per SEBI guidelines, the single plan structure would apply to all new mutual fund schemes with effect from October 1, 2012 while existing schemes with multiple investment plans can accept fresh subscriptions only under one-single plan.

While the fund houses can offer SIP option in their new schemes but they should not launch multiple investment plans for one single scheme.

Therefore, mutual funds will stop accepting fresh investments in over 100 schemes where subscription or SIP registration is being discontinued. According to a circular from National Stock Exchange (NSE), total 126 schemes and from Bombay Stock Exchange (BSE), a total of 84 schemes to be discontinued for subscription/SIP registration with regard to SEBI guidelines on single plan structure for mutual fund schemes.

SEBI has come up with the decision in order to clutter one scheme with numerous plans and to simplify the mutual fund investments and re-energise the sector.

According to SEBI, cash investments up to Rs 20,000 per investor, per mutual fund will be allowed for every financial year without PAN, but the redemptions or dividends would be paid only through a banking channel. Also, SEBI informed fund houses that debt funds should not be over-exposed to a particular sector.