Introduction of "Direct Plan"

SEBI has directed Mutual Funds /AMC vide SEBI Circular no. CIR/IMD/DF/21/2012 dated September 13, 2012 to provide a separate plan for direct investments, i.e. investments not routed through a distributor, in existing as well as new schemes. Hence HDFC Mutual Fund has launched separate plans under existing open-ended schemes for direct investments called "Direct Plan" with effect from January 1, 2013.
 

The "Direct Plans" were launched with effect from January 1, 2013.
 

Investments under the Direct Plan are open to all categories of investors who choose to invest without routing the transaction via a distributor.  

All Plans / Options / Sub-Options offered currently under "Existing Plans" of the Schemes are also available for subscription under the "Direct Plan". Thus, there shall be 2 plans available for subscription under the schemes viz. Existing Plan and Direct Plan.

Examples:

 

Scheme	Existing Plan	Direct Plan (introduced w.e.f. January 1, 2013)
HDFC MF Monthly Income Plan (HDFC MIP)	HDFC MIP - Long Term Plan (HDFC MIP - LTP)  HDFC MIP - Short Term Plan (HDFC MIP – STP)	HDFC MIP - LTP – Direct Plan  HDFC MIP - STP – Direct Plan
HDFC Equity Fund	HDFC Equity Fund	HDFC Equity Fund – Direct Plan

Investments under Direct Plans can be made through various modes offered by us for investing directly except Stock Exchange platform(s) and any other platform(s) where investors’ applications for subscription of units are routed through distributors.

 

The "Direct Plan" has a lower expense ratio as compared to existing plans in the same schemes, as there is no commission to be paid to the distributor under this plan.

Yes. Since there is a difference in the expenses charged by the Direct and Existing Plans under every scheme, there will be a difference in the NAVs for both these Plans.
 

"Direct Plan" is available under the following schemes:

• Open-ended schemes
• HDFC Liquid Fund - Premium Plan
• New Fund Offer of Fixed Maturity Plans under close-ended schemes launched on or after the January 1, 2013 and
• Interval Schemes (commencing from the first day of the Specified Transaction Period immediately after January 1, 2013).

"Direct Plan" will not include Exchange Traded Funds and plans under existing schemes which are discontinued for further subscriptions.

All Plans / Options / Sub-Options offered under the schemes will also be available for subscription under the "Direct Plan" (except Plans / Options / Sub-Options that have been discontinued).

No, the scheme portfolio will be the same for both "Existing plan" and "Direct Plan."

No, scheme characteristics such as Investment Objective, Asset Allocation Pattern, Investment Strategy, risk factors, facilities offered and terms and conditions including load structure will be the same.

Investors subscribing under Direct Plan of any scheme will have to indicate the Scheme / Plan name in the application followed by "Direct Plan". For example, HDFC Cash Management Fund – Treasury Advantage Plan - Direct Plan. Additionally, investors should mention "Direct" in the ARN column of the application form

Investors should indicate the Plan (viz. Direct Plan / Regular Plan) for which the subscription is made by indicating the choice in the appropriate box provided for this purpose in the application form. In case of valid applications received without indicating any choice of Plan, the application will be processed for the Plan as under:
 

Scenario	ARN Code mentioned by the investor	Plan mentioned by the investor)	Default Plan to be captured)
1	Not mentioned	Not mentioned	Direct Plan
2	Not mentioned	Direct	Direct Plan
3	Not mentioned	Regular	Direct Plan
4	Mentioned	Direct	Direct Plan
5	Direct	Not mentioned	Direct Plan
6	Direct	Regular	Direct Plan
7	Mentioned	Regular	Regular Plan
8	Mentioned	Not mentioned	Regular Plan

In cases of wrong/ invalid/ incomplete ARN codes are mentioned on the application form, the application shall be processed under Regular Plan. The AMC shall contact and obtain the correct ARN code within 30 calendar days of the receipt of the application form from the investor/ distributor. In case, the correct code is not received within 30 calendar days, the AMC shall reprocess the transaction under Direct Plan from the date of application without any exit load

In this scenario, the units will be allotted under the "Direct Plan" of the scheme. In such cases, the minimum additional application amount for the scheme will apply as the minimum investment amount for "Direct Plan".

In this scenario, the distributor code will be ignored and the units for the investment will be allotted under Direct Plan. In such cases, the minimum additional application amount for the scheme will apply as the minimum investment amount for "Direct Plan".

In case of investments in schemes like HDFC TaxSaver, HDFC Long Term Advantage Fund or the lock-in option of HDFC Children’s Gift Fund, you can switch-out / redeem after the lock-in period is completed.

In this case, the units will be allotted under Existing Plan with the NAV of January 2, 2013.

For such purchases, the NAV of the previous business day is applicable. The NAV will be the same as that for the existing plan on December 31, 2012. In other words, units will be allotted in the "Direct Plan" with the NAV of December 31, 2012, subject to realization of funds.

Since the application was received after cut-off time on December 31, 2012 the same shall be deemed to have been received on the next Business Day and hence the units will automatically be allotted under the corresponding "Direct Plan" at the applicable NAV.

In case of SIPs / STPs (Fixed or Capital Appreciation) registered prior to January 1, 2013 without any distributor code under the "Existing Plan", installments triggered on or after January 1, 2013 will be processed under the "Direct Plan". The terms and conditions of the existing registered enrolment shall continue to apply.

 

No. You have to submit a written request for the same. The request format is available with our Investor Service Centres (ISCs) and on our website. Such a request has to be submitted at least 15 days prior to the next installment date. Intervening installments, if any, will continue to be processed under the "Existing Plan".

You have to cancel the existing registration and register afresh into the "Direct Plan".

* with or without distributor code
You have to cancel the existing registration and register afresh into the "Direct Plan".

Such investments will continue to be under the "Existing plan". In case you wish to transfer them to the Direct Plan of the same scheme, you may submit a switch request. Such switches will not be subject to exit load. However, investors should consult their professional tax advisor before initiating such requests.

You will be required to submit a switch request for transferring of units from "Existing plan" to "Direct plan". Please note that such switches will entail exit load. Investors should consult their professional tax advisor before initiating such requests.

In this scenario, the units will be switched into the "Existing Plan" switch-in scheme irrespective of whether the units being switched are routed vide a broker or not. Please note that such switches may entail exit load / tax consequences. Investors should consult their professional tax advisor before initiating such requests.

 

For your investments which were routed through a distributor whether before or after January 1, 2013, any switch-out of these units from Existing Plan to Direct Plan of the same / other Scheme / Plan shall be subject to applicable exit load, if any.

For your investments which were made directly i.e. without any distributor code, exit load will not be levied on switch-out of units from Existing Plan to Direct Plan of the same Scheme / Plan.

No exit load shall be levied in case of switch of units from Direct Plan to Existing Plan of the same Scheme/ Plan. However, any switch-out or redemption of such investment from the Existing Plan shall be subject to exit load based on the original date of investment in the Direct Plan.

The NAV for the switch-in scheme will be as on the same date as that of the switch-out scheme.

The criteria of NAV applicability will remain the same as applicable for existing plans of the schemes.

Existing investments cannot be transferred automatically under the Direct Plan, since plans are available for fresh / new investments only. Existing investments would continue to be a part of the existing scheme and you can switch them into the Direct Plan. Please note that such switches may entail exit load / tax consequences which need to be considered and understood before proceeding.

This is not allowed since investments made under the Direct Plan cannot be routed through a distributor code.

Yes, in this case, the request will be processed for units in the Existing Plan. If you wish to submit a redemption / switch-out request for units in the Direct Plan, "Direct Plan" must clearly be mentioned on the request.

In this case, you have to submit 2 separate redemption / switch-out requests, one for each plan.

Yes, in this case, the request will be processed for units in the plan in which they are available.

No, you may invest / switch the minimum additional application amount for investing into the direct plan of the scheme. For example, if you hold units in HDFC Equity Fund – Growth, you may invest  1,000 or above as the first investment in HDFC Equity Fund – Direct Plan – Growth in the same folio.

The plan will be determined from the transaction request.

Since the stock exchange platforms necessitate routing transactions through distributors, these platforms can not be used for investing in the direct plans. However, investors holding units in the demat mode can redeem units in these plans from their demat account using the stock exchange platforms.

Since the NAV for "Direct Plan" and "Existing Plan" under the same scheme will be different, any change in the requests already processed (for example – addition / deletion of broker code) will not be processed.

 

Since the NAVs in the direct plan and existing plan of a scheme are different, requests for addition / deletion of broker code can not be processed. You will have to submit a switch request from the direct plan to the existing plan.

Since the NAVs in the direct plan and existing plan of a scheme are different, requests for addition / deletion of broker code can not be processed. You will have to submit a switch request from the direct plan to the existing plan.

Since the NAVs in the direct plan and existing plan of a scheme are different, requests for addition / deletion of broker code can not be processed. You will have to submit a switch request from the existing plan to the direct plan.