“In order to facilitate merger of schemes, it has been decided that merger or consolidation shall not be seen as change in fundamental attribute of the surviving scheme...,” Sebi said in a circular.
The circular explained that at the time of the merger of schemes, the fund houses need give the unitholders of surviving schemes an exit option if MFs can show that there was no change in the fundamental attribute of the scheme.
Also the MFs have to demonstrate that the circumstances merit the merger of the scheme and the interest of the unitholders are not adversely affected. For instance, a fund house is merging scheme ‘B’ with scheme ‘A’, then as per the existing norms, MFs have to give exit option to the unitholders of both the schemes at the current net asset value (NAV).
As per the revised norms, the unitholders of scheme ‘A’, or the surviving scheme, need not be given exit option if the afforesaid conditions could be proved by the MFs.