AMFI to Submit Concerns on Discontinuation of Retirement and Children's Funds to SEBI

Mutual Fund Industry Raises Concerns Over SEBI's Discontinuation of Retirement and Children's Fund Categories

Association of Mutual Funds in India (AMFI) has expressed its reservations to the Securities and Exchange Board of India (SEBI) regarding the regulator's decision to discontinue retirement and children's mutual fund categories. AMFI Chief Executive Venkat Chalasani stated that the industry body will make a formal representation to SEBI, highlighting potential challenges with the proposed changes.

SEBI recently introduced a new category of life cycle funds, citing that the new structure would address similar long-term investment goals. However, industry data reveals that there are approximately 62-63 lakh investor folios in these categories, with assets valued at around Rs 57,000 crore.

AMFI has conveyed its concerns to SEBI, stating that the new life cycle fund category may not adequately address the needs of investors in the discontinued categories. The industry will have to wait for SEBI's final decision on the matter.

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SEBI Chair Tuhin Kanta Pandey has stated that the regulator will examine industry concerns around the proposed closure of solution-oriented mutual fund schemes, including tax implications and merger-related costs. The regulator has also announced a sweeping overhaul of the mutual fund categorisation framework, introducing a new "Life Cycle Fund" category, scrapping solution-oriented schemes, and imposing strict portfolio overlap limits.