Sebi has informed DSP Blackrock Investment Managers that re-categorising its income scheme into an open ended money market mutual fund scheme would not violate norms as investment objective remains unchanged.
DSP Blackrock Investment Managers, the investment manager to the schemes of DSP Blackrock Mutual Fund, is to convert its 'open-ended income scheme' to 'open ended money market mutual fund scheme'.
In an informal guidance released today, the Securities and Exchange Board of India (Sebi) said that "the existing scheme being a broader category (income fund) which also includes money market schemes, it appears that the type of scheme continues to be the same".
"The change as proposed appears to be with a view to provide clarity to the type of instruments/funds in which the scheme investments are being made," it added.
Further, the market regulator noted that the investment objective and terms of issue of the scheme remain the same and the proposed change "does not appear to have any effect on the interest of the unit holders".
"Hence the proposed change would not attract the compliances of Regulation 18 (15A) of Sebi (Mutual Fund) Regulations," Sebi said.
DSP Black Rock had sought clarification from Sebi whether the proposed change in category of the scheme would attract compliances with the regulation.
Under the regulation, the trustees have ensure that no change in the "fundamental attributes" of any scheme is carried out unless each unit holder is informed about the proposed modification and a public notice issued on the same.
Besides, the unit holders have to be given an option to exit at the prevailing net asset value without any exit load.
The fundamental attributes of a scheme refer to investment objective of the scheme, asset allocation pattern, terms of issue and investment strategies, among others.
DSP Blackrock had informed Sebi that the only modification which would happen as a result of the proposed categorisation is that the words describing the type of the scheme would be changed.
However, it had also said that the change would be intimated to the unit holders through public notice and an addendum to the scheme information document.
The primary investment objective of the scheme is to generate income through investment in a portfolio comprising of treasury bills and other central government securities with a residual maturity less than or equal to one year.
Sebi said its guidance is based on the information given by DSP Blackrock and that it "does not express a decision of the Board on the questions referred".
