Mutual Fund Offer Documents have two parts:
Scheme Information Document (SID)
Which has details of the scheme.
Statement of Additional Information (SAI)
Which has statutory information about the mutual fund, that
is offering the scheme.
The Table of Contents
Highlights
Introduction
Risk Factors
Standard
Scheme-specific
Provisions regarding minimum no. of investors in the scheme
Any other special considerations
Definitions
Due Diligence Certificate (issued by the AMC)
Information about the scheme
Units and Offer
Fees & Expenses
Rights of Unit-holders
Penalties, Litigation etc.
The picto-meter will categorize the risk in the scheme at one of five levels of
risk, shown as follows:
SCHEME INFORMATION DOCUMENT (SID)
Level of Risk Definition Example
Low Principal at low risk Liquid or Money Market Fund
Moderately Low Principal at moderately
low risk
Fixed Maturity Plans/Capital Protection
Oriented Scheme
Moderate Principal at moderate
risk
Short term Income Fund/Conservative
Monthly Income Plans
Moderately High Principal at moderately
high risk
Index Fund/Balanced Fund/Equity
Dividend Yield Fund
High Principal of high risk Sector Fund/Equity Focussed Fund
It contains every detail regarding the fund house other than a
particular scheme for which investors wants to apply.
SAI is relevant for all the schemes offered by a mutual fund.
Contents of SAI :
Information about Sponsors, AMC and Trustee Company
(includes contact information, shareholding pattern,
responsibilities, names of directors and their contact
information, profiles of key personnel, and contact information of
service providers {Custodian, Registrar & Transfer Agent,
Statutory Auditor, Fund Accountant (if outsourced) and
Collecting Bankers}
Contents of KIM :
Name of the AMC, mutual fund, Trustee, Fund Manager and scheme
Dates of Issue Opening, Issue Closing & Re-opening for Sale and Repurchase
Plans and Options under the scheme
Risk Profile of Scheme
Price at which Units are being issued and minimum amount / units for
initial purchase, additional purchase and re-purchase
Benchmark
Dividend Policy
Performance of scheme and benchmark over last 1 year, 3 years, 5
years and since inception.
Loads and expenses
Contact information of Registrar for taking up investor grievances
The AMC decides on a scheme to take to the market. AMC prepares the Offer Document for the NFO. This needs to
be approved by the Trustees and the Board of Directors of the AMC.
· The documents are filed with SEBI. SEBI does not Approve/Disapprove the OD it only gives its observations.
· The Offer Document is one of the most important sources of information on the scheme, to help prospective investors
evaluate the merits and demerits of investing in it. OD is the Operating Document and describes the product.
· Mutual Fund Offer Documents have two parts: Scheme Information Document (SID) Which has details of the scheme,
and Statement of Additional Information (SAI) which has statutory information about the mutual fund, that is offering the
scheme.
· In practice, SID and SAI are two separate documents, though the legal technicality is that SAI is a part of the SID.
· SEBI has also instituted a product labeling system, Level of risk is depicted by a riskometer showing five levels of risk:
Low, Moderately Low, Moderate, Moderately High, High
· SAI contains every detail regarding the fund house other than a particular scheme for which investors wants to apply,
So, it is obvious to understand that single SAI is relevant for all the schemes offered by a mutual fund.
· The KIM is essentially a summary of the SID and SAI.
· As per SEBI regulations, every application form is to be accompanied by the KIM.
· Updation of SID for 1st time (Post – NFO )
a) Scheme launched in the first 6 months of the financial year (say, April 2010), SID must be updated within 3 months
of the end of the same financial year (i.e. by June 2011).
b) Scheme launched in the second 6 months of the financial year (say, October 2010) The first update of the SID is
due within 3 months of the end of the next financial year (i.e. by June 2012).
· SID is regularly updated every year or whenever there is a change in a Fundamental attribute of the scheme.
· SAI is Regularly updated by the end of 3 months of every financial year or any Material changes have to be updated on
an ongoing basis and uploaded on the websites of the mutual fund and AMFI.
· KIM has to be updated at least once a year or whenever there is need based change in SID or SAI.
· The OD is issued by the AMC on behalf of the trustees.
· The AMC is responsible for the information in the OD.
· Labeling of Mutual Fund Products:
1) Nature of scheme such as to create wealth or provide regular income in an indicative time horizon (short/ medium/ long
term).
2) Brief about the investment objective (in a single line sentence) followed by kind of product in which investor is investing
(Equity/Debt).
3) Riskometer: A pictorial representation of the risk to the principal invested in a mutual fund product will be depicted using a
‘Riskometer’.
