6.1 Mandatory Documents I: Scheme Information Document and Statement of Additional Information
Key Takeaways
- The SID is scheme-specific and the SAI is common to all schemes of the mutual fund.
- The SID states the investment objective, asset allocation pattern, risk factors, benchmark, load structure and expenses.
- The SAI carries statutory information about the sponsor, trustees, AMC, service providers, tax and legal matters.
- Both must be updated within three months of the end of the financial year, with addenda issued for material interim changes.
- The SAI is incorporated by reference into the SID, so the two together form the offer document.
Two Documents, One Offer
What used to be a single offer document is now split into two, because most of the content was identical across a fund house's schemes and repeating it was wasteful.
- The Scheme Information Document (SID) carries everything specific to one scheme.
- The Statement of Additional Information (SAI) carries the statutory and structural information common to the entire mutual fund.
The SAI is incorporated by reference into the SID, so the two together constitute the offer document. An investor who reads only the SID has still legally been given the SAI's contents.
Both are filed with SEBI before launch. SEBI does not approve the scheme's merits or certify the accuracy of its contents; it reviews for compliance with disclosure requirements. Every SID carries a statement to that effect, and a distributor who implies SEBI has vetted the investment is misrepresenting.
Contents of the Scheme Information Document
| Area | What it discloses |
|---|---|
| Investment objective | What the scheme seeks to achieve, in a single stated sentence |
| Asset allocation pattern | Indicative and maximum ranges for each instrument type |
| Where the scheme invests | Permitted instruments, and any specific strategy or restrictions |
| Risk factors | Standard risk factors plus scheme-specific ones |
| Risk-o-meter | The scheme's risk level on the six-point scale |
| Benchmark | The index against which performance is measured, with the reason for choosing it |
| Fund manager | Name, experience and other schemes managed |
| Load structure | Exit load, and the fact that entry load is nil |
| Expenses | Recurring expense limits and actual expense ratio |
| Plans and options | Regular and direct plans; growth and IDCW options |
| Minimum amounts | For purchase, additional purchase, redemption and systematic transactions |
| Past performance | In the prescribed format where the scheme has a track record |
| Investor rights and services | Redressal, statements, dispatch timelines |
| Penalties and litigation | Pending matters against the sponsor, AMC or trustees |
SEBI revised the SID format in 2024 to make it more usable: a defined table of contents, a section of key scheme highlights near the front, and standardised ordering across the industry, so that an investor comparing two schemes finds the same information in the same place.
The two entries a distributor should read first are the asset allocation pattern and the risk factors. The asset allocation table states the maximum equity a scheme may hold, which is what actually determines behaviour and tax treatment. A "conservative hybrid" permitted up to 25% equity behaves very differently from one permitted up to 10%.
Contents of the Statement of Additional Information
The SAI covers the fund rather than the scheme:
- Constitution of the mutual fund — the trust, the trust deed, the sponsor's contribution
- Sponsor — details and financial information
- Trustees — names, qualifications, responsibilities, and the trusteeship arrangement
- AMC — directors, key personnel, net worth, other business activities
- Service providers — custodian, RTA, auditors, bankers, fund accountant
- Condensed financial information for existing schemes
- How to apply — application procedure, modes of payment
- Rights of unitholders
- Tax, legal and general information — including the tax treatment of investments and distributions
- Investor grievance redressal history
- Associate transactions and dealings with group entities
Because the SAI carries tax information, a distributor answering a tax question should check the SAI rather than improvising — and should note that tax positions change with each Finance Act, so an SAI updated at year-end may itself lag a mid-year amendment.
Keeping the Documents Current
| Requirement | Rule |
|---|---|
| Regular update | Both SID and SAI updated within three months of the end of the financial year |
| Interim material change | Communicated through an addendum, which forms part of the document |
| Distribution of addenda | Attached to the KIM and application form, and displayed on the AMC website |
| Fundamental attribute change | Requires written notice to unitholders and an exit option at NAV without exit load for at least 30 days |
That last row is heavily examined. A fundamental attribute is the scheme's type, its investment objective, or its terms including load structure. Changing one is not simply a disclosure event: unitholders must be notified in writing, the change advertised, and every unitholder given a window of at least 30 days to exit at the applicable NAV without any exit load. The reasoning is that an investor bought a specific proposition, and if that proposition changes they must be free to leave without penalty.
Where to Find Them
SID and SAI must be available on the AMC website and on the AMFI website, and provided to any investor who asks. The Key Information Memorandum — covered next — must physically accompany the application form, and it directs the investor to the full documents.
An AMC proposes to change a scheme's investment objective. What must it do for existing unitholders?
Which document contains details of the sponsor, trustees, custodian and the tax treatment of investments?
By when must a mutual fund update its SID and SAI in the ordinary course?