Description

DSP Mutual Fund reopens DSP Credit Risk Fund for subscriptions from January 01, 2026 with investment cap of INR 10 crore per PAN and revised exit load structure.

Summary

DSP Mutual Fund has announced the reopening of subscriptions for DSP Credit Risk Fund effective January 01, 2026, after a temporary suspension that began on December 16, 2021. The scheme will accept fresh purchases, additional purchases, and systematic transactions subject to a maximum investment limit of INR 10 crore per PAN and a revised exit load structure with significantly higher penalties for early redemptions.

Key Points

  • Subscriptions were temporarily suspended since December 16, 2021
  • Scheme reopens for all types of subscriptions from January 01, 2026
  • Total investment value per PAN capped at INR 10 crore (including existing investments and fresh inflows)
  • Exit load increased from 1% to 3% for redemptions within 12 months
  • Previous 10% free exit allowance removed
  • No exit load for redemptions after 12 months from allotment date
  • Exit load changes apply to all prospective investments and systematic transactions registered on or after the effective date
  • Designated employees’ mandatory investments under SEBI alignment requirements are exempt from these restrictions

Regulatory Changes

Exit Load Structure Changes:

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 Plan and Regular Plan
  • For systematic transactions (SIP, STP), exit load prevailing on registration/enrolment date applies

Compliance Requirements

For Investors:

  • Maximum investment limit of INR 10 crore per PAN across all transactions (fresh purchases, additional purchases, Switch-in, SIP, STP-in)
  • Must update PAN, KYC, email address, mobile number, and nominee details with AMC
  • Should link PAN with Aadhaar Number
  • Review Investor Charter available on Fund website
  • Check for unclaimed redemptions or IDCW payments

For AMC:

  • Update Scheme Information Document (SID) and Key Information Memorandum (KIM) to reflect new investment caps and exit load structure
  • Apply new exit load structure to all prospective investments from effective date

Important Dates

  • December 15, 2021: Notice issued for temporary suspension of subscriptions
  • December 16, 2021: Subscriptions temporarily suspended
  • December 26, 2025: Announcement date for reopening
  • January 01, 2026: Effective date for reopening of subscriptions with new conditions

Impact Assessment

For Existing Investors:

  • Subject to INR 10 crore per PAN cap for any additional investments
  • Previous investments not affected by exit load changes unless new subscriptions made
  • Higher exit load (3%) discourages short-term redemptions

For New Investors:

  • Access to credit risk fund strategy now available after 4+ year suspension
  • Investment limit may restrict large institutional or HNI allocations
  • Significantly higher exit load (3% vs previous 1%) for 12-month lock-in period encourages longer holding periods
  • No partial free exit option (previous 10% allowance removed)

Market Impact:

  • Limited direct market impact as this affects single mutual fund scheme
  • May influence investor behavior towards longer-term holdings in the credit risk category
  • Signals fund manager’s confidence in portfolio quality and liquidity management

Impact Justification

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