Description

HSBC Tax Saver Equity Fund will merge into HSBC Flexi Cap Fund effective January 23, 2026, with exit option available without exit load from December 24, 2025 to January 22, 2026.

Summary

HSBC Mutual Fund is merging HSBC Tax Saver Equity Fund (ELSS Fund) into HSBC Flexi Cap Fund effective January 23, 2026. SEBI granted no objection to the merger on December 01, 2025. Investors who do not favor the merger can redeem or switch without exit load during the exit period from December 24, 2025 to January 22, 2026. Existing SIP/XSIP/SWP will continue in merging schemes during exit period and will automatically shift to surviving scheme on January 23, 2026.

Key Points

  • Merging Scheme: HSBC Tax Saver Equity Fund (ELSS Fund)
  • Surviving Scheme: HSBC Flexi Cap Fund (Flexi Cap Fund)
  • Merger approved by AMC Board and Trustees Board
  • SEBI no objection granted on December 01, 2025
  • Merger constitutes change in fundamental attributes under Regulation 18(15A) of SEBI MF Regulations, 1996
  • No change to surviving scheme’s name or attributes post-merger
  • Exit option available only for merging scheme investors, not for surviving scheme
  • Existing SIP/XSIP/STP/SWP will automatically transfer to surviving scheme

Regulatory Changes

The merger is approved in accordance with Regulation 18(15A) of SEBI (Mutual Funds) Regulations, 1996, which governs changes in fundamental attributes of schemes. SEBI has provided regulatory approval through its communication dated December 01, 2025.

Compliance Requirements

  • Members must inform investors about the scheme merger
  • Investors must be made aware of exit option without exit load during specified period
  • Platform must process redemptions and switches without exit load from December 24, 2025 to January 22, 2026
  • SIP/XSIP/STP/SWP registrations must continue during exit period
  • Automatic transfer of SIP/XSIP/STP/SWP to surviving scheme on January 23, 2026
  • Merging scheme will cease to exist after merger date

Important Dates

  • December 23, 2025: Circular issue date
  • December 24, 2025: Exit period begins (without exit load)
  • January 22, 2026: Exit period ends (both days inclusive)
  • January 23, 2026: Merger effective date (or next business day if non-business day)
  • January 23, 2026: Merging scheme ceases to exist; SIP/XSIP/STP/SWP shift to surviving scheme

Impact Assessment

Investor Impact: Investors in HSBC Tax Saver Equity Fund will see their holdings converted to HSBC Flexi Cap Fund. The change represents a shift from ELSS Fund category with 3-year statutory lock-in to Flexi Cap Fund category. Investors opposing the merger have 30-day exit window without exit load charges.

Operational Impact: NSE MF Invest platform must facilitate seamless processing of redemptions and switches during exit period. Automatic migration of systematic plans (SIP/XSIP/STP/SWP) from merging to surviving scheme requires system updates.

Market Impact: Limited broader market impact as this is a scheme-specific merger affecting only HSBC Mutual Fund investors. The merger consolidates two schemes, potentially improving efficiency and reducing operational complexity for the fund house.

Impact Justification

Scheme merger affects existing investors in HSBC Tax Saver Equity Fund with exit option available. Moderate impact on mutual fund investors using NSE platform.