Offer Document

OFFER DOCUMENT

WHAT IS AN OFFER DOCUMENT (OD) 

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OD of a mutual fund scheme is a prospectus issued by an Asset Management Company / Sponsor. It invites the public for subscription in units of the scheme. It discloses the information which is adequate to enable an investor to make an informed investment decision.

Offer Document (OD) 

A legal document

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issued by AMC or Sponsor

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OD describes the product

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Very important document from the perspective of prospective investor

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Primary vehicle for investment decision

Offer Document (OD) *

All ODs are to be approved by the trustees of the Mutual Fund;

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ODs are prepared and issued by the Asset Management Company;

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All ODs are filed with SEBI with filing fees (Rs. 25,000)

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Modifications, if any, are advised by SEBI within 21 working days from the date of its filing;

Offer Document (OD) 

Close ended fund: issued at the time of fund – launch

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Open ended fund: revision after every two years

KIM: Abridged version of OD which is distributed along with the application form

Contents of the Offer Document         

Summary information Definitions Risk Factors Legal and Regulatory Compliance Financial Information Constitution of the Mutual Fund Investment objectives and policies Management of the Fund Offer Related information

Contents of the Offer Document Summary Information ( Cover Page) :

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Name of Mutual Fund/ AMC

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Name of Scheme/ Type of scheme

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Period of opening / closing

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SEBI Disclaimer

Contents of the Offer Document Risk Factors 

Standard Risk factors

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Scheme specific risk factor(s).

Contents of the Offer Document Legal and Regulatory Compliance 

AMC shall confirm that a Due diligence certificate is duly signed by compliance officer / CEO / Whole time Director / MD

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Certificate to the effect

(a) OD prepared is in accordance with SEBI (MF) Regulations, (b) legal requirements are complied with, (c) disclosures are true and fair, (d) intermediaries named in the OD are registered with SEBI.

Contents of the Offer Document Financial Information 

Expenses - Sales load, CDSC, Initial issue expenses, estimated annual recurring expenses

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Condensed Financial information of schemes - Information regarding schemes launched during the last 3 years -Historical per unit statistics

Contents of the Offer Document Constitution of the Mutual Fund / Management of the Fund 

Name of the sponsor / AMC / Board of Trustees

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Powers of Trustees

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Names of Key personnel

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Custodian / Registrars

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Investors relations officer

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Name, age, qualifications and experience of fund manager(s)

Contents of the Offer Document Investment objectives and Policies 

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Investment only in transferable securities in the money market and the capital market or in privately placed debt or securitised debt provided they are rated not below investment grade. Minimum and maximum asset allocation under equity, debt and money market instruments has to be specified in the OD. MF can alter the asset allocation for a short term period on defensive consideration. Investment Strategy: Regarding portfolio turnover, overseas investments, limits, stock lending etc.

Contents of the Offer Document

Offer Related Information 

Investment procedure

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Schemes policy on dividends & distributions, ISTs (Inter Scheme transfers)

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Associate Transactions

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Borrowing Policy

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NAV and Valuation

Contents of the Offer Document Offer Related Information

contd…

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Procedure for Redemption or Repurchase

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Description of accounting policies

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Tax treatment of investments

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Investors’ rights and services

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Redressal mechanism for investor grievances