Scheme Related Information

A mutual fund scheme is sold on the strength of what the fund has written down about it, and the regulations treat those writings as the offer itself rather than as marketing. The SEBI (Mutual Funds) Regulations, 2026 define an offer document as the Scheme Information Document together with the Statement of Additional Information, require it to carry disclosures adequate for an investor to make an informed decision, and forbid it from containing anything false, misleading or incorrect; the Key Information Memorandum is the abridged form that must accompany every physical application. For a distributor this is daily work rather than theory. A question about an exit load, a lock-in, what the scheme may and may not hold, or who manages it has a written answer somewhere, and knowing which of the three documents holds it is most of the job. The place to start is the document that describes the scheme itself.

What does the Scheme Information Document contain?

The SID is about one scheme. It sets out what the scheme is trying to do and how, which is everything an investor needs to judge whether it fits them.

• The investment objective, in the fund's own words.
• The asset allocation pattern — how much may go into each kind of security.
• Where the scheme will and will not invest.
• The risk factors, both the ones common to all schemes and the ones specific to this one.
• Loads and expenses, and how units are bought and redeemed.
• Who manages it, and how performance will be benchmarked.

What is in the Statement of Additional Information?

The SAI carries the information that is the same for every scheme the fund runs: details of the sponsor, the trustees and the AMC, the service providers, the fund's constitution, condensed financial information and the general legal and tax position.

The reason for the split is practical. A fund may run forty schemes, and the identity of its sponsor does not change between them. Putting that material in one document, referenced by every SID, keeps each SID about its own scheme rather than about the organisation behind it.

What is the Key Information Memorandum for?

The KIM is an abridged version of the SID, and it must accompany the application form. Its purpose is that an investor about to sign something has the essentials in front of them rather than a document they would have to send for.

Being abridged, it is not a substitute for the SID — it is the entry point to it. An examination question will sometimes offer the KIM as the document that carries full risk factors or the complete asset allocation; it does not.

How do these documents stay current?

They are not written once. A scheme's documents are updated so that what an investor reads reflects the scheme as it now is, and a material change has to be communicated rather than quietly absorbed. The principle to hold on to is that disclosure is continuing rather than a one-off event at launch.

What does a fund disclose beyond what it must?

Everything above is a floor. A fund is free to publish more than the regulations demand, and most funds do. The monthly factsheet is the familiar example — a page or two per scheme carrying the largest holdings, the sector split, the fund manager's name and tenure, returns against the benchmark, and statistics such as portfolio turnover or, for a debt scheme, yield to maturity and modified duration. None of that is the offer document. It is the fund choosing to show its working.

Material of this kind usually takes a few recognisable forms:

• Monthly or quarterly factsheets summarising each scheme's portfolio and performance.
• Fund manager commentary explaining what was bought or sold, and why.
• House views on markets, interest rates or a particular sector.
• Portfolio statistics beyond the prescribed set — turnover, average maturity, weighted average yield, tracking error.
• Investor education material, calculators and scheme comparisons on the AMC's website.

Voluntary does not mean unpoliced. Anything the AMC advertises has to follow the Advertisement Code in the Fifth Schedule to the Regulations, which requires it to be accurate, fair, complete and unambiguous, bars testimonials, celebrity endorsements and rankings built on any criteria, and specifically requires the information to be consistent with what the SID, the SAI and the KIM disclose. The standard warning it prescribes — "Mutual Fund investments are subject to market risks, read all scheme related documents carefully" — is fixed word for word, and nothing may be added to it or removed from it.

The practical distinction is worth holding on to. A factsheet is a convenience, not the document of record: where a factsheet and the SID appear to disagree, the SID governs, and advice built on a one-page summary rests on nothing the fund is bound by. Voluntary disclosure can also be changed or withdrawn — a statistic published for five years is not owed to anyone — so a client trained to expect it may have to be un-trained later. And the line itself moves. Practices that begin as AMFI guidance to its members have a habit of ending up prescribed by SEBI, at which point they stop being optional at all.

What the examination tends to ask here

Questions in this area turn almost entirely on which document holds what. The reliable trap is the KIM: it is abridged, it must accompany the application form, it is the entry point to the SID rather than a replacement for it, and on the strict definition it is not part of the offer document at all — that is the SID and the SAI together. The other recurring split is scheme-level against fund-level, so anything about the objective, the asset allocation pattern, the load structure or the scheme's own risk factors belongs to the SID, while the sponsor, the trustees, the AMC, the service providers and the general legal and tax position belong to the SAI. Expect the mandatory-against-voluntary distinction to be tested too, usually by presenting a factsheet or a piece of fund manager commentary as though it carried the standing of a filed document. Reading each question for whether it asks what a fund must publish or what it merely may publish settles most of them.