Description

DSP Mutual Fund re-opens subscriptions for DSP Credit Risk Fund effective 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 removal of temporary suspension on fresh subscriptions for DSP Credit Risk Fund, effective January 01, 2026. The scheme was closed for fresh purchases, additional purchases, and systematic transactions since December 16, 2021. The re-opening comes with two major conditions: (1) a cap of INR 10 crore per PAN on total investment value including existing and fresh inflows, and (2) a significantly revised exit load structure increasing from 1% to 3% for redemptions within 12 months.

Key Points

  • DSP Credit Risk Fund re-opens for subscriptions from January 01, 2026 after suspension since December 16, 2021
  • Investment cap of INR 10 crore per PAN (includes existing investments and fresh inflows including Switch-in/SIP/STP-in)
  • Exit load increased from 1% to 3% for units redeemed or switched out within 12 months from allotment date
  • Previous 10% exemption limit for exit load (allowing nil exit load on first 10% redemption within 12 months) has been removed
  • No exit load applicable for redemptions after 12 months from allotment date
  • No exit load on switches between Direct Plan and Regular Plan
  • Exit load exemption for Designated Persons under SEBI alignment of interest requirements
  • Changes applicable to all prospective investments including systematic transactions registered on or after effective date

Regulatory Changes

Exit Load Structure Revision:

Previous Structure:

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

Revised Structure (effective January 01, 2026):

  • 3% exit load for all redemptions within 12 months from allotment date
  • Nil exit load for redemptions on or after 12 months from allotment date
  • No exit load for switches between Direct and Regular Plans

Investment Restrictions:

  • Total investment value per PAN capped at INR 10 crore (cumulative of existing holdings and new subscriptions)
  • Applies to all fresh purchases, additional purchases, Switch-ins, SIPs, and STP-ins

Compliance Requirements

  • Unit holders must ensure total investment per PAN does not exceed INR 10 crore limit
  • AMCs must update PAN, KYC, email address, mobile number, and nominee details
  • Unit holders advised to link PAN with Aadhaar Number
  • Investors should review Investor Charter on Fund website
  • Check for unclaimed redemptions or IDCW payments
  • Systematic transaction registrations done on or after January 01, 2026 subject to new exit load prevailing on registration date

Important Dates

  • December 16, 2021: Subscriptions temporarily suspended
  • December 26, 2025: Notice issued for re-opening
  • January 01, 2026: Effective date for re-opening of subscriptions with new conditions
  • Exit Load Period: 12 months from date of allotment of units

Impact Assessment

Investor Impact:

  • Significant deterrent to short-term redemptions with 3% exit load (tripled from 1%)
  • Investment cap of INR 10 crore per PAN may restrict large institutional or HNI investors
  • Removal of 10% redemption exemption increases costs for all investors needing liquidity within 12 months
  • Positive for existing investors as fund stability may improve with reduced redemption pressure

Market Impact:

  • Re-opening provides investment avenue in credit risk category after 4+ year suspension
  • Higher exit loads and investment caps indicate fund management’s focus on stability and preventing sudden outflows
  • May attract long-term investors (12+ month holding period) seeking credit risk exposure
  • Restrictions suggest cautious approach to managing liquidity in credit risk assets

Operational Impact:

  • AMCs must implement PAN-level investment tracking to enforce INR 10 crore cap
  • System updates required for new exit load calculations
  • Existing systematic transactions (SIPs/STPs registered before January 01, 2026) continue with old exit load structure

Impact Justification

Affects investors in DSP Credit Risk Fund with new investment caps and significantly higher exit loads, but limited to single mutual fund scheme