Scheme Information Document (SID), Indian Mutual Funds

A Scheme Information Document (SID) is the principal statutory offer document that an asset management company (AMC) must file with SEBI and make available to investors before launching any new mutual fund scheme in India. Mandated under Regulation 29 of the SEBI (Mutual Funds) Regulations, 1996, the SID serves a function analogous to a prospectus in the equity markets: it discloses the scheme’s investment objective, asset allocation, risk factors, benchmark, fund manager, fee structure, and tax implications in a standardised format prescribed by SEBI. Investors are entitled to a free copy on request. The SID must be read alongside the Statement of Additional Information (SAI), which contains statutory and house-level information common to all schemes of the fund house, and the Key Information Memorandum (KIM), a one-to-two page summary designed for point-of-sale distribution.

Regulatory basis

The SID framework derives from:

• Regulation 29 of the SEBI (Mutual Funds) Regulations, 1996, requires every scheme to have an offer document and prescribes minimum disclosure requirements.
• SEBI circular SEBI/IMD/CIR No. 9/120982/08 dated 14 January 2008, standardised the SID format and introduced the KIM as a separate document.
• SEBI Master Circular for Mutual Funds (most recently SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/137 dated 27 May 2024), consolidates current SID content requirements, the riskometer display obligation, and the disclosure of portfolio manager details.

Before 2008, the SID and the statutory information were combined in a single “Offer Document.” The bifurcation into SID + SAI was introduced to ensure that scheme-specific information was presented without being buried under boilerplate statutory text.

Mandatory content

SEBI prescribes a standardised SID template. The document must contain, in the prescribed sequence:

Cover page

• Scheme name (compliant with SEBI categorisation norms).
• Type of scheme (open-ended/close-ended/interval; category per the scheme rationalisation circular 2017).
• Riskometer (six-level scale: Low, Low to Moderate, Moderate, Moderately High, High, Very High) displayed prominently on the cover page.
• Benchmark riskometer (as of 2021, the AMC must also display the riskometer of the benchmark index).
• Standard disclaimer: “Mutual Fund investments are subject to market risks. Read all scheme related documents carefully.”
• Name and address of the AMC.
• Name and address of the trustee company.
• Date of the SID and date up to which valid.

Part I, Information about the scheme

1. Type and category of the scheme: e.g., “Open-ended equity scheme investing in large-cap stocks” (Large Cap Fund category under 2017 rationalisation).
2. Investment objective: Stated unambiguously. An “indicative portfolio” clause is not permitted.
3. Asset allocation table: Minimum and maximum percentage allocation to each asset class, sub-class, and instrument type.
4. Where will the scheme invest?: Description of permissible instruments (equity, debt, money market, derivatives, REITs/InvITs, overseas securities within SEBI’s overseas investment cap).
5. Investment strategy: How the fund manager intends to construct the portfolio, stock selection philosophy, and risk control.
6. Fundamental attributes: The attributes that, if changed, trigger the mandatory exit window under Regulation 18(15A).
7. Benchmark: Name of the benchmark index. Post-2021, schemes may have a “Tier 1” and “Tier 2” benchmark.
8. Fund managers: Names, qualifications, and years of experience of the fund manager(s). SEBI mandates that no fund manager may manage more than a prescribed number of schemes simultaneously (see SEBI fund manager limits).
9. Investment restrictions: Cross-reference to the Second Schedule of the 1996 Regulations and any scheme-specific limits.

Part II, Information about the NFO/continuous offer

1. New fund offer (NFO) period: Opening and closing dates; minimum and maximum subscription amounts.
2. Allotment: Timeline and process.
3. Plans and options: Direct Plan, Regular Plan, Growth Option, IDCW (Income Distribution cum Capital Withdrawal) Option, and any sub-options.
4. Applicable NAV: Cut-off times and NAV applicability rules; see SEBI NAV applicability rule 2021 and mutual fund cut-off times.
5. Minimum investment amounts: For lump sum, SIP, STP, and SWP.
6. Exit loads: Maximum exit load, schedule of loads for different holding periods. Subject to the exit load cap rule.
7. Dividend policy (IDCW policy): Frequency, conditions, and source for IDCW distributions.

Part III, Units and offer

1. Ongoing offer price: NAV-based; applicable subscription/redemption dates.
2. Transparency/NAV disclosure: Obligation to publish NAV on AMFI website daily.
3. Account statements: Timeline for dispatch (electronic within 5 business days of each transaction; annual physical on request).

Part IV, Fees and expenses

1. Annual recurring expenses (TER): Maximum permissible TER slab per the TER regulation. Expense ratio for Regular and Direct Plans.
2. Brokerage and transaction costs: Permitted brokerage, STT, and other transaction costs.
3. Load structure: Entry load (prohibited since August 2009); exit load schedule.

Part V, Rights of unitholders

Statutory rights including voting rights (at 75% threshold), inspection rights, and grievance rights via the SCORES portal.

Part VI, Penalties, pending litigation or proceedings

Material litigation and regulatory actions against the AMC, sponsor, and trustee must be disclosed.

Part VII, Miscellaneous

• Accounting policies.
• Tax treatment of unitholders (incorporating relevant updates from debt MF tax 2023 and FoF taxation harmonisation).
• Documents available for inspection.

Filing process

1. Draft SID filing: The AMC files the draft SID with the SEBI Investment Management Department (IMD) and simultaneously uploads it on the SEBI and AMFI websites.
2. SEBI review: IMD issues observations within 21 working days (30 days for first-time filings by a new AMC).
3. Response to observations: AMC incorporates SEBI’s observations into the revised SID.
4. Final SID: Uploaded at least five working days before the NFO opening date.
5. Advertisement: A KIM is published in at least two newspapers in the prescribed format.

SID versus SAI versus KIM

Updates to SID

An AMC must update the SID and make the updated document available on its website:

• Annually (within three months of the close of the financial year).
• Whenever fundamental attributes change (accompanied by the 30-day exit window).
• Whenever SEBI issues directions to modify a disclosure.
• Upon scheme mergers, the surviving scheme SID is updated to reflect the merged portfolio and investor base.

SEBI scheme mergers are governed by the scheme merger and conversion rules.

Riskometer disclosure in SID

The riskometer must appear on the SID cover page and must be updated monthly on the AMC website (since February 2021). The methodology for computing product-level risk, based on credit risk, interest rate risk, and liquidity risk for debt; and market capitalisation risk and sector concentration for equity, is prescribed by SEBI. See the dedicated article on the riskometer framework.

See also

• Mutual fund
• Mutual fund industry in India
• SEBI (Mutual Funds) Regulations, 1996
• Key Information Memorandum
• Statement of Additional Information
• Riskometer framework (India)
• SEBI Investment Management Department
• TER regulation and slabs
• SEBI NAV applicability rule 2021
• SEBI scheme rationalisation circular 2017
• SEBI scheme merger and conversion rules

References

1. SEBI (Mutual Funds) Regulations, 1996, Regulation 29.
2. SEBI Circular SEBI/IMD/CIR No. 9/120982/08, 14 January 2008, SID/SAI/KIM format.
3. SEBI Master Circular SEBI/HO/IMD/IMD-PoD-1/P/CIR/2024/137, 27 May 2024.
4. SEBI Circular dated 5 January 2021, Monthly riskometer update obligation.
5. AMFI, “Guidelines for Scheme Information Document”, amfiindia.com.