Direct plan rules across fund houses :: Business Line

This is the concluding part of a three-part series on Direct plan and the FAQs below are based on the general rules followed across all Fund houses.

However, some of the applicability may vary from Fund to Fund and hence SID/KIM/Addendums issued by the Asset Management Companies or their Web sites can be referred to for more, and latest, details.

I have an investment in the existing/regular plan which is not routed through any distributor. Will the future dividend reinvestments take place automatically in the Direct plan?

No. Dividend reinvestments will take place in the existing/regular plan even though the investment is not routed through the distributor.

However, if you request for the conversion from regular/existing plan to Direct plan, then all future dividend reinvestments after conversion will happen only under the Direct plan.

If I want to convert my investments, which were not done through the distributor, from the existing/regular plan wherein exit load period is still in force, will the exit load be deducted at the time of conversion (switch) to Direct plan?

No. The exit load will not be deducted at the time of conversion (switch).

However, the exit load will be deducted if the units are redeemed/switched-out from the Direct plan before the exit load period is over.

The age of the exit load will be from the date of investment in the existing/regular plan. As the exit load applicability may vary from fund to fund, you may refer to the Addendums issued by the Asset Management Companies or their Web sites for more details.

If I want to convert my investments which were done through the distributor from the existing/regular plan wherein exit load period is still in force, will the exit load be deducted at the time of conversion (switch) to Direct plan?

Yes. The exit load will be deducted at the time of conversion (switch) itself.

After conversion, for any further switch or redemption from the Direct plan, no exit load will be deducted even if the exit load period is not over.

As the exit load applicability may vary from fund to fund, you may refer to the Addendums issued by the Asset Management Companies or their Web sites for more details.

I have a dividend transfer plan (DTP) in the existing/regular plan and also a special product of STP which was launched by AMCs based on appreciation/reverse switch. Both these plans are not routed through the distributor.

Will the future instalments of DTP and also the future instalments of the special STPs be converted into Direct plan automatically?

As the guidelines in this regard vary from Fund to Fund, you may refer to the Addendums issued by the Asset Management Companies or their Web sites for more details.

My current investments in MF are in demat form. If I wish to make additional purchase in the same folios under Direct plan and hold it in non-demat form, will I be able to do so ?

Yes. You can purchase additional units in the same folio under Direct plan and hold the units in non-demat form.

(Contributed by CAMS Viveka, an Investor Education Initiative from CAMS. Views expressed are general practices in the MF industry and may vary on a case-to-case basis).

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