Description

DSP Credit Risk Fund reopens for subscriptions from January 01, 2026 with investment cap of INR 10 crore per PAN and revised exit load structure of 3% for redemptions within 12 months.

Summary

DSP Mutual Fund has announced the reopening of subscriptions for DSP Credit Risk Fund effective January 01, 2026, after being temporarily suspended since December 16, 2021. The scheme will reopen with new restrictions including a cap of INR 10 crore per PAN on total investment value and a significantly increased exit load of 3% on redemptions within 12 months (increased from 1% previously).

Key Points

  • Subscriptions were suspended on December 16, 2021 for all fresh purchases, additional purchases, and systematic transactions
  • Scheme reopens for subscription from January 01, 2026
  • Total investment value per PAN capped at INR 10 crore (including existing investments and fresh inflows via Switch-in/SIP/STP-in)
  • Exit load increased from 1% to 3% for units redeemed or switched out within 12 months from date of allotment
  • No exit load for redemptions after 12 months from allotment date
  • Previous provision allowing 10% redemption without exit load within 12 months has been removed
  • Exit load changes apply to all prospective investments including systematic transactions registered on or after the effective date
  • No exit load for switches between Direct Plan and Regular Plan
  • Exemption for transactions by Designated Persons under SEBI alignment of interest requirements

Regulatory Changes

Exit Load Structure Revision:

Previous Structure:

  • Nil exit load for redemptions up to 10% within 12 months
  • 1% exit load for redemptions exceeding 10% within 12 months
  • Nil exit load after 12 months

New Structure (Effective January 01, 2026):

  • 3% exit load for all redemptions within 12 months from allotment
  • Nil exit load after 12 months from allotment
  • No more 10% free redemption window

Investment Cap:

  • Maximum investment of INR 10 crore per PAN (aggregate of existing and new investments)

Compliance Requirements

  • Unit holders must ensure total investment per PAN does not exceed INR 10 crore
  • Unit holders are requested to update PAN, KYC, email address, mobile number, and nominee details with AMC
  • Unit holders should link their PAN with Aadhaar Number
  • Investors should review the Investor Charter on the Fund’s website
  • Investors should check for unclaimed redemptions or IDCW payments
  • SID and KIM of the scheme have been amended to reflect these changes

Important Dates

  • December 15, 2021: Notice issued for temporary suspension of subscriptions
  • December 16, 2021: Subscriptions suspended (effective date)
  • December 26, 2025: Notice issued for resumption of subscriptions
  • January 01, 2026: Scheme reopens for subscriptions with new conditions

Impact Assessment

Impact on Investors:

  • Existing investors: Can resume fresh investments subject to INR 10 crore cap; existing holdings under old exit load structure
  • New investors: Subject to 3% exit load for 12-month holding period and INR 10 crore investment cap
  • Systematic investors: New SIP/STP registrations after January 01, 2026 subject to revised exit load

Market Impact:

  • Fund reopening provides liquidity option for credit risk exposure
  • Higher exit load (3% vs 1%) and removal of 10% free redemption window discourages short-term investments
  • Investment cap limits large institutional participation
  • Measures suggest AMC’s cautious approach to managing fund inflows and redemptions

Operational Impact:

  • AMC can resume accepting fresh subscriptions after nearly 4-year suspension
  • Investment cap and exit load structure designed to ensure stable asset base and discourage volatile flows

Impact Justification

Affects investors in DSP Credit Risk Fund with significant changes to exit load structure and investment caps, but limited to single mutual fund scheme