Mutual Funds scheme-reorganisation-merger-conversion

Scheme reorganisation, merger, and conversion

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Scheme reorganisation, merger, and conversion are SEBI-regulated processes by which AMCs can combine schemes, change scheme categorisation, or restructure underlying portfolios. Per scheme merger and conversion rules , these processes require SEBI approval, 75%-unitholder consent threshold, and 30-day notification window.

Common reorganisation types

Scheme merger

  • Two existing schemes consolidate into one.
  • Common in post-categorisation cleanup and acquisition integration.

Scheme conversion

Scheme wind-up

Investor rights

During the 30-day notification window:

  • Exit-load-free redemption.
  • Information about reorganisation details.
  • Implicit consent if no redemption.

Tax treatment

The reorganisation is treated as a switch (taxable event) :

  • Deemed redemption of source units.
  • Capital gain / loss computed.
  • Tax payable per holding period and category.

See also

External references

References

  1. SEBI (Mutual Funds) Regulations 1996.
  2. AMFI Best Practice Guidelines.

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