Description

DSP Credit Risk Fund reopens for subscriptions from January 01, 2026 after temporary suspension since December 16, 2021, with new investment caps 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 resume accepting fresh purchases, additional purchases, and systematic transactions subject to new conditions including a total investment cap of INR 10 crore per PAN and a revised exit load structure with increased charges for early redemptions.

Key Points

  • Subscriptions into DSP Credit Risk Fund were temporarily suspended since December 16, 2021
  • Scheme reopens for subscription from January 01, 2026
  • Total investment value per PAN (including existing and fresh inflows) capped at INR 10 crore
  • Exit load structure significantly revised with 3% charge for redemptions within 12 months (previously 1% above 10% threshold)
  • No exit load for switch between Direct Plan and Regular Plan
  • Changes applicable to prospective investments and systematic transactions registered on or after effective date
  • Exemption for Designated Persons transactions under SEBI alignment of interest requirements
  • SID and KIM of the scheme amended to reflect these changes

Regulatory Changes

The notice constitutes an addendum to the Scheme Information Document (SID) and Key Information Memorandum (KIM) of DSP Credit Risk Fund. The revised exit load structure replaces the previous tiered system:

Previous Exit Load:

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

Revised Exit Load:

  • 3% for all redemptions within 12 months from allotment date
  • Nil for redemptions on or after 12 months

For systematic transactions (SIP, STP), the exit load prevailing at registration/enrolment date applies.

Compliance Requirements

  • Investors must ensure total investment per PAN does not exceed INR 10 crore (including existing holdings and new subscriptions/switches/SIPs/STPs)
  • Unitholders requested to update PAN, KYC, email address, mobile number, and nominee details with AMC
  • Unitholders advised to link PAN with Aadhaar Number
  • Investors should review Investor Charter on fund website
  • Check for unclaimed redemptions or Income Distribution cum Capital Withdrawal (IDCW) payments

Important Dates

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

Impact Assessment

Investor Impact:

  • Existing investors face stricter exit conditions with tripled exit load (3% vs 1%) for early redemptions
  • New investors limited to maximum INR 10 crore exposure per PAN across all holdings
  • Reduced liquidity flexibility due to higher exit charges within 12-month holding period
  • Systematic investment plans affected by investment cap

Market Impact:

  • Moderate impact on mutual fund industry; affects credit risk fund category
  • Measures appear designed to control fund size and manage redemption pressure
  • Higher exit loads may encourage longer holding periods and reduce volatility from sudden redemptions
  • Investment cap may redirect larger investors to alternative credit risk funds or strategies

Operational Impact:

  • AMC implementing investment monitoring per PAN to enforce INR 10 crore cap
  • Systematic transaction registrations subject to new exit load regime
  • Fund management gains greater stability through reduced redemption risk and controlled inflows

Impact Justification

Affects investors in DSP Credit Risk Fund with new investment caps at INR 10 crore per PAN and significantly higher exit loads (3% vs 1% previously) for redemptions within 12 months, impacting liquidity and investment strategy for existing and prospective investors.