Swing pricing framework for mutual fund schemes

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... framework for open ended debt mutual fund schemes (except overnight funds, Gilt funds and Gilt with 10-year maturity funds). Under this framework, to begin with, the swing pricing framework will be made applicable only for scenarios related to net outflows from the schemes. The framework shall be a hybrid framework with: a. a partial swing during normal times and b. a mandatory full swing during market dislocation times for high risk open ended debt schemes. I. Swing pricing for normal times a. For normal times, the swing pricing framework is stipulated as under: i. AMFI shall prescribe broad parameters for determination of thresholds for triggering swing pricing which shall be followed by the AMCs. AMFI shall also presc .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... 17/114 dated October 6, 2017 , which: i. have High or Very High risk on the risk-o-meter in terms of SEBI circular SEBI/HO/IMD/DF3/CIR/P/2020/197 dated October 5, 2020 (as of the most recent period at the time of declaration of market dislocation); and ii. classify themselves in the cells A-III, B-II, B-III, C-I, C-II and C-III of Potential Risk Class (PRC) Matrix in terms of SEBI circular SEBI/HO/IMD/IMD-II DOF3/P/CIR/2021/573 dated June 7, 2021 as tabulated below. c. A minimum swing factor as under shall be made applicable to the schemes mentioned at para II(b) above and the NAV will be adjusted for swing factor. Table 1 Minimum swing factor for open ended debt schemes* Max Credit Risk of sche .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... III. Other aspects pertaining to swing pricing a. When swing pricing framework is triggered and swing factor is made applicable (for normal time or market dislocation, as the case may be), both the incoming and outgoing investors shall get NAV adjusted for swing factor. b. All AMCs shall make clear disclosures along with illustrations in the SIDs including information on how the swing pricing framework works, under which circumstances it is triggered and the effect on the NAV for incoming and outgoing investors. c. Swing pricing shall be made applicable to all unitholders at PAN level with an exemption for redemptions upto ₹ 2 lacs for each mutual fund scheme for both normal times and market dislocation. d. AMCs shall h .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X