Key Information Memorandum (KIM), Indian Mutual Funds

The Key Information Memorandum (KIM) is the standardised, condensed summary document that every asset management company (AMC) in India must make available to investors at the point of sale or subscription of a mutual fund scheme. Introduced by SEBI circular SEBI/IMD/CIR No. 9/120982/08 dated 14 January 2008 as part of the bifurcation of the erstwhile combined Offer Document into the Scheme Information Document (SID) and the Statement of Additional Information (SAI), the KIM condenses the most commercially relevant disclosures into one or two pages. It must be read alongside the full SID and SAI; a KIM alone does not constitute sufficient due diligence. The KIM regulatory framework is embedded within the SEBI (Mutual Funds) Regulations, 1996 and is updated through the SEBI Master Circulars issued by the Investment Management Department.

Regulatory basis and purpose

Before January 2008, investors received the full Offer Document, a combined disclosure running to over 100 pages, at the point of subscription. SEBI recognised that the document was too large for point-of-sale practicality and introduced the KIM as a standardised summary that distributors and AMCs must print and distribute at the point of sale. The KIM must be made available free of charge and its content is strictly controlled to prevent material omissions.

The KIM does not require a separate filing with SEBI; it is derived from the filed SID and SAI. However, the KIM must faithfully represent the content of those documents and must be updated simultaneously whenever the SID is updated.

Mandatory content of the KIM

SEBI prescribes the content and sequence of the KIM. It must include, at a minimum:

Scheme identification

• Name of the mutual fund and AMC.
• Scheme name, type, and category (per the SEBI scheme rationalisation circular 2017).
• Nature: open-ended, close-ended, or interval.

Investment objective and benchmark

• Investment objective (verbatim from SID).
• Benchmark index.
• Riskometer display (six-level scale per the riskometer framework).

Asset allocation summary

• A condensed table of the principal asset classes and their minimum-maximum allocation ranges.

Fund manager details

• Name and experience of the fund manager(s), consistent with limits under the SEBI fund manager limits.

Minimum investment amounts

• Minimum lump-sum investment for Regular Plan and Direct Plan.
• Minimum SIP instalment amount and minimum number of instalments.

Entry and exit load

• Entry load: Nil (prohibited since SEBI circular dated 30 June 2009).
• Exit load schedule: applicable percentages and holding periods. Subject to the exit load cap rule.

Recurring expenses

• Maximum permissible total expense ratio (TER) as per applicable slabs under TER regulation.
• Indicative TER for Regular Plan and Direct Plan.

NAV information

• Publication: daily on AMFI and AMC websites.
• Cut-off time reference: for same-day NAV applicability per the NAV applicability rule 2021.

Tax information

• Summary of tax treatment for different investor categories (residents, NRIs, corporates).
• Note on debt fund taxation changes effective 1 April 2023 per SEBI debt MF tax 2023.
• Note on LTCG/STCG for equity funds as per the Finance Act.

Standard risk disclaimers

• “Mutual Fund investments are subject to market risks.”
• Product label (colour-coded circle: Brown for High/Very High; Yellow for Moderate/Moderately High; Blue for Low/Low to Moderate).

Direct Plan versus Regular Plan

Since 1 January 2013, every mutual fund scheme in India offers a Direct Plan (where investors invest directly with the AMC without a distributor, attracting a lower TER) and a Regular Plan (where investors invest through a registered distributor, with a higher TER that includes distribution commission). The KIM must clearly disclose the TER difference between the two plans. This distinction is relevant to the B30/T30 incentive framework, which permits additional distributor commission for inflows from cities outside the top 30.

KIM versus SID versus SAI

Distribution and availability

AMCs must:

• Make the KIM available at all AMC offices, registrar offices (CAMS, KFintech), and distributor offices.
• Upload the current KIM on the AMC website.
• Send the KIM electronically with every digital transaction confirmation for new investors.
• Ensure distributors do not modify the KIM content.

SEBI’s advertisement code for mutual funds governs any advertising material that references or summarises the KIM.

Investor obligations

An investor who receives and signs the KIM is considered to have been provided adequate information at the point of sale. This is the regulatory “read before you invest” mechanism. The SEBI investor charter for mutual funds reinforces the investor’s right to receive the KIM free of charge prior to subscribing.

See also

• Mutual fund
• SEBI (Mutual Funds) Regulations, 1996
• Scheme Information Document
• Statement of Additional Information
• Riskometer framework (India)
• TER regulation and slabs
• Exit load cap rule
• SEBI NAV applicability rule 2021
• B30/T30 incentive framework
• SEBI investor charter for mutual funds

References

1. SEBI Circular SEBI/IMD/CIR No. 9/120982/08, 14 January 2008, SID/SAI/KIM format introduction.
2. SEBI (Mutual Funds) Regulations, 1996, Regulation 29.
3. SEBI Circular dated 30 June 2009, Abolition of entry load.
4. SEBI Master Circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/137, 27 May 2024.
5. AMFI, “KIM guidelines for distributors”, amfiindia.com.