- May 2014
- December 2013
Ruby Jacob, 25 Oct 2012
Thousands of plans of various mutual funds schemes have been discontinued for new subscription with effect from 1 October 2012 in accordance with SEBI's recent notification for 'one scheme one plan' to mutual fund Asset Management Companies.
While the plans themselves have not been discontinued investors will not be allowed to make fresh investments in them. SIP investments will also be stopped in the notified plans. The plans will continue to exit until investors redeem their money from it. As of date 33 AMCs have submitted list of discontinued plans of various schemes managed by them.
If you have invested in one of the existing plans the money will be shifted to the notified plan instead. You can view each mutual fund AMCs discontinued plans list on their respective website or view the entire list in Value Research page.
Majority of the plans that have been discontinued are plans of debt schemes of various mutual fund AMCs. Almost every mutual fund house was in the practice of offering multiple plans under a single scheme in order to cater to different categories of investors. For instance they would offer plans going by the names retail, institutional, super-institutional, regular, etc under the same scheme.
This allowed fund houses to give preferential treatment to large investors and leave small investors behind. Following SEBI's new notification every scheme is allowed to have just one plan for all categories of investors. This is part of SEBI's measures for an overhaul of mutual fund services scene in the country.
SEBI has also directed AMCs to launch direct plan in all schemes for investors who wish to make investments directly in a scheme without going through a distributor, which is the dominant trend right now. Recently the government brought mutual funds under RGESS for tax saving. These are part of initiatives of SEBI and the government to revive mutual fund industry and to encourage participation of common investors in equities.