Description

SEBI approved merger of HSBC Tax saver Equity Fund into HSBC Flexi Cap Fund effective January 23, 2026, with no changes to the surviving scheme.

Summary

HSBC Asset Management (India) Private Limited and HSBC Trustees (India) Private Limited have announced the merger of HSBC Tax saver Equity Fund (Merging Scheme) into HSBC Flexi Cap Fund (Surviving Scheme), effective January 23, 2026. The merger has been approved by SEBI vide communication dated December 01, 2025, and is in accordance with Regulation 18(15A) of SEBI (Mutual Funds) Regulations, 1996. The surviving scheme will retain all its existing attributes with no changes to investment objectives, asset allocation, or expense structure.

Key Points

  • SEBI granted no-objection for the merger on December 01, 2025
  • Merger represents a change in fundamental attributes of HSBC Tax saver Equity Fund
  • No new scheme will be created as a result of this merger
  • Surviving scheme (HSBC Flexi Cap Fund) will remain unchanged post-merger
  • No exit option applicable to unitholders of the surviving scheme as their interests are not adversely affected
  • Merging Scheme: ELSS Fund (open-ended equity linked saving scheme with 3-year lock-in and tax benefits)
  • Surviving Scheme: Flexi Cap Fund (open-ended dynamic equity scheme investing across large, mid, small cap stocks)
  • Both schemes aim for long-term capital appreciation through equity investments

Regulatory Changes

The merger is executed under Regulation 18(15A) of SEBI (Mutual Funds) Regulations, 1996, which governs changes in fundamental attributes of mutual fund schemes. SEBI’s approval dated December 01, 2025 confirms regulatory compliance for this consolidation.

Compliance Requirements

  • AMC and Trustees to ensure merger execution as per approved terms
  • Unitholders of merging scheme to be informed of the merger details
  • Scheme Information Document (SID) of surviving scheme remains valid with no amendments required
  • Annual scheme recurring expenses structure to remain unchanged for the surviving scheme

Important Dates

  • SEBI No-Objection Date: December 01, 2025
  • Effective Merger Date: January 23, 2026 (or next business day if non-business day)

Impact Assessment

Impact on Merging Scheme Unitholders: Unitholders of HSBC Tax saver Equity Fund will become unitholders of HSBC Flexi Cap Fund. The key change is from an ELSS category (with 3-year statutory lock-in and tax benefits) to a Flexi Cap category (dynamic equity scheme without lock-in restrictions).

Impact on Surviving Scheme: No changes to HSBC Flexi Cap Fund’s name, investment objective, asset allocation pattern, or expense structure. Unitholders of the surviving scheme face no adverse impact and therefore no exit option is provided.

Market Impact: Consolidation of schemes under HSBC Mutual Fund portfolio, streamlining product offerings on BSE StAR MF Platform. This represents a regulatory-compliant scheme rationalization exercise.

Impact Justification

Affects unitholders of HSBC Tax saver Equity Fund with merger into HSBC Flexi Cap Fund. Medium impact as it involves scheme restructuring with SEBI approval and regulatory compliance under SEBI MF Regulations 18(15A).