AMFI to make representation to SEBI on concerns around discontinuation of retirement and children’s funds

Recently, SEBI Chair Tuhin Kanta Pandey in an exclusive conversation with Moneycontrol had stated that the regulator will examine industry concerns around the proposed closure of solution-oriented mutual fund schemes, including tax implications and merger-related costs and also the issues in life cycle funds.

• AMFI to represent concerns to SEBI on fund category changes
• SEBI to scrap retirement and children's fund categories
• Industry has until March 31 to address the issue with SEBI

Did our AI summary help?

The mutual fund industry body, Association of Mutual Funds in India (AMFI), will be making a representation to Securities and Exchange Board of India (SEBI) regarding the regulator’s decision to discontinue retirement and children’s mutual fund categories, AMFI Chief Executive Venkat Chalasani said during a call to discuss AMFI's monthly numbers.

SEBI recently introduced a new category of life cycle funds and proposed discontinuing the existing retirement and children’s fund categories, stating that the new structure would address similar long-term investment goals.

Responding to concerns , Chalasani said AMFI has already conveyed its reservations to the regulator. “SEBI is of the opinion that the life cycle fund will address both the retirement and the children’s fund categories. However, we have conveyed the industry concerns and highlighted that there could be certain challenges,” he said.

According to industry data, there are around 62–63 lakh investor folios in these categories with assets of roughly Rs 57,000 crore.

Chalasani added that AMFI, as the industry’s trade body, will formally represent the matter to the regulator.

“We are looking to make a representation to SEBI. We will see how it pans out,” he said, adding that the industry will have to wait for the regulator’s final decision.

Recently, SEBI Chair Tuhin Kanta Pandey in an exclusive conversation with Moneycontrol had stated that the regulator will examine industry concerns around the proposed closure of solution-oriented mutual fund schemes, including tax implications and merger-related costs and also the issues in life cycle funds.

On February 26, the market regulator had unveiled a sweeping overhaul of the mutual fund categorisation framework, introducing a new “Life Cycle Fund” category, scrapping solution-oriented schemes and imposing strict portfolio overlap limits to curb duplication across schemes. The regulator has superseded its 2017 categorisation circular.