Merger of HDFC Focused Large-Cap Fund with HDFC Equity Fund & Change in Fundamental Attributes of HDFC Short Term Plan

The following are the two changes to the schemes of HDFC Mutual Fund:
a. HDFC Focused Large-Cap Fund, an open ended equity scheme will be merged with HDFC Equity Fund, an open ended growth scheme.
b. There will be change in the fundamental attributes of HDFC Short Term Plan, an open–ended income scheme.
 

HDFC Mutual Fund and HDFC Trustee have entered into an agreement with Morgan Stanley Investment Management Private Limited and Board of Trustees of Morgan Stanley Mutual Fund pursuant to which the schemes of Morgan Stanley Mutual Fund (MSMF) will be transferred to and form part of HDFC Mutual Fund subject to approval of unit holders of Morgan Stanley Mutual Fund. Post the proposed acquisition of MSMF Schemes, HDFC Mutual Fund may have in its bouquet of products, similar schemes. Thus, in order to avoid schemes with similar objectives and to enable optimal utilization of resources, in the interest of investors, it is proposed to carry out certain changes to the MSMF Schemes by merging certain MSMF Schemes with existing schemes of HDFC Mutual Fund. As part of the proposal, Board of Directors of HDFC Trustee Company Limited and HDFC Asset Management Company Limited have also approved the merger of HDFC Focused Large-Cap Fund into HDFC Equity Fund.
 

Yes. Notice detailing the aforesaid proposed changes has been published in May 14, 2014 issue of Business Standard (English daily newspaper having nationwide circulation) and Navshakti (Marathi newspaper) for the benefit of the unit holders. Please click here if you wish to view the same.
 

• A. HDFC Focused Large-Cap Fund - Merger of schemes is considered as a change in the fundamental attributes of the schemes as per Circular No. SEBI/MFD/Cir No. 05 / 12031 / 03 dated June 23, 2003 issued by SEBI in this behalf. As per Regulation 18(15A) of the SEBI (Mutual Funds) Regulations, 1996 (MF Regulations) , change in fundamental attributes can be carried out only after the unit holders of the schemes concerned have been informed of the change via written communication and an option to exit the scheme(s) within a period of 30 days at the prevailing NAV without any exit load is provided to them. In accordance with the said regulation, due to the merger of HDFC Focused Large- Cap Fund with HDFC Equity Fund, the exit option letter has been sent to you by HDFC Mutual Fund.
  B. HDFC Short Term Plan - The proposed changes constitute a change in the fundamental attributes of HDFC Short Term Plan, which as per Regulation 18(15A) of the SEBI (Mutual Funds) Regulations, 1996 (“MF Regulations”), can be carried out only after the unit holders of the Scheme have been informed of via written communication and an option to exit the Scheme within a period of 30 days at the prevailing Net Asset Value (“NAV”) without any exit load is provided to them. In accordance with the said regulation, due to the change in fundamental attributes of HDFC Short Term Plan, the exit option letter has been sent to you by HDFC Mutual Fund.




 
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There is no change in the fundamental attributes of the Transferee Scheme i.e. HDFC Equity Fund, the circumstances merit a merger and the interest of the unit holders of HDFC Equity Fund is not adversely affected. Hence, the exit option letter is not required to be provided to investors of HDFC Equity Fund. The same is in accordance with SEBI Circular No. IMD / DF / 15 / 2010 dated October 22, 2010. Further, you may note that our aforementioned notice issued by us and published on May 14, 2014 serves as the written communication to the unit holders of the Transferee Schemes i.e. HDFC Equity Fund.
 

• The existing unit holders whose valid applications have been received by us till the 3.00 p.m. on May 14, 2014, can only exercise the Exit Option. Hence it has been sent by us to only the aforementioned unit holders.
   

 

 

 

The same will come into effect after the close of business hours on June 20, 2014 which is called the Effective Date.
 

You can submit investments in HDFC Focused Large-Cap Fund till June 20, 2014 as this scheme will cease to exist thereafter.
 

After the merger, HDFC Focused Large-Cap Fund will cease to exist and HDFC Equity Fund will be the surviving scheme. The investment objective, investment pattern, annual scheme recurring expenses structure and all other provisions of HDFC Equity Fund will remain unchanged and apply. To know the details on the changes, please click here.

No. The details are as follows:

• Plans: Regular & Direct
• Options: Growth, Dividend (Payout and Re-investment)

No. The details are as follows:
(i) In respect of each purchase / switch-in of units, an Exit Load of 1.00% is payable if Units are redeemed / switched-out within 1 year from the date of allotment.
(ii) No Exit Load is payable if Units are redeemed / switched-out after 1 year from the date of allotment.
However, please note that after merger, units allotted in HDFC Equity Fund (in lieu of units held in HDFC Focused Large-Cap Fund) will be treated as new subscription. Hence, the period of holding for the purpose of charging exit load and for taxation, will restart after the close of business hours on June 20, 2014.
 

No. The Minimum Application Amount for Purchase / Additional Purchase will be  5,000 and any amount thereafter/  1,000 and any amount thereafter respectively.
The Minimum Repurchase Amount / Number of Units will be  500 or 50 Units respectively.

 

Yes. To know the details on the changes, please click here.

Yes, existing unit holders whose valid applications have been received by us upto 3.00 p.m. on May 14, 2014, may redeem their units or switch to other available/ eligible schemes of HDFC Mutual Fund at the prevailing NAV without payment of any exit load between May 22, 2014 and June 20, 2014 (upto 3.00 pm on June 20, 2014) (both days inclusive). Other unit holders of the said scheme can also redeem but subject to the payment of applicable exit load.
 

 

 

The redemption payment will be made within 10 Business Days of receipt of valid redemption request from you if you choose to exercise the exit option. However, we would endeavour to make redemption payment within 3–4 Business Days from the date of acceptance of the redemption request.
 

No. You need to submit an original signed redemption/ switch request if you wish to exit from the Scheme(s).
 

You may visit any of our nearest Investor Service Centres or contact us on our toll free numbers - 1800 3010 6767/ 1800 419 7676. If you have registered your email ID with us, we can send the account statement to you over email too. After receipt of the account statement, if you wish to exit from the scheme, you may submit the request at our between May 22, 2014 and June 20, 2014 (upto 3.00 pm on June 20, 2014).
 

 

 

 

No. The option to redeem without payment of any exit load during the aforementioned Exit Option Period, is applicable only for those existing unit holders under the Schemes whose valid investment applications have been received by us upto 3.00 p.m.on May 14, 2014.
 

Yes. Such requests will be subject to the applicable load in respect of the Schemes.
 

No, there is no action required if you are in agreement with the proposed changes.

Unit holders who do not exercise their exit option on or before 3 p.m. on June 20, 2014 would be deemed to have consented to the merger/ change in fundamental attributes. Further, at the close of business hours on June 20, 2014, HDFC Focused Large-Cap Fund (Transferor Scheme) will cease to exist and unit holders of HDFC Focused Large-Cap Fund will be allotted units under the corresponding option of HDFC Equity Fund (Transferee Scheme) at the last available applicable NAV. For unit holders in HDFC Short Term Plan, their investment continues without any changes.
 

 

 

 

 

 

 

 

We have sent the Exit Option letter to all the existing unit holders, whose valid investment application have been received by us on May 14, 2014 upto 3.00 p.m. If you fall in the said category of unit holders and have still not received the letter, you can contact us on our toll-free numbers - 1800 3010 6767 / 1800 419 7676 or visit the nearest Investor Service Centre. Further, please click here if you wish to view and download the Exit Option Letter.
 

Yes, you will have the option to exit but only after you submit request for release of pledges / encumbrances prior to submitting your redemption/switch request within the aforementioned Exit Option Period.
 

Yes, you will have the option to exit but only after the lien is vacated / revoked prior to applying for redemption/switch and within the aforementioned Exit Option Period.
 

No. The STT, if any, on redemption/ switch of units, exercised during the Exit Option Period/ on extinguishment of units under HDFC Focused Large-Cap Fund (Transferor Scheme) and allotment under HDFC Equity Fund (Transferee Scheme) upon merger of scheme on June 20, 2014, shall be borne by HDFC Asset Management Company Ltd.
 

Yes. There can be tax liability due to merger of the Schemes or if you exit from the Schemes before June 20, 2014. In case of merger of Schemes, there may be a change in the number of units held in HDFC Equity Fund in comparison to the units in HDFC Focused Large-Cap Fund which may result in capital gain / capital loss in the hands of the investors thus entailing tax consequences. For more clarifications, we would advise you to consult your tax advisors.
 

Yes. TDS, if any, at applicable rates will be deducted by HDFC Mutual Fund / HDFC Asset Management Company Ltd. in case of NRIs.
 

The allotment will be in the same folio.

Yes. For e.g. if your investment was under HDFC Focused Large-Cap Fund - Direct Plan – Dividend Reinvestment Option, you will be allotted units under HDFC Equity Fund – Direct Plan – Dividend Reinvestment Option only. However, in this case if you already hold any units in the same folio under HDFC Equity Fund – Direct Plan with Dividend Payout Option, this payout option will be overwritten with reinvestment option. Thus, the scheme in your folio will reflect as HDFC Equity Fund – Direct Plan – Dividend Reinvestment Option after the close of business hours on June 20, 2014.
 

The units allotted in the HDFC Equity Fund (Transferee Scheme) will be treated as a fresh subscription. Accordingly all provisions under the Transferee Scheme(s) will apply to such units, except exit load provisions, which shall apply as per HDFC Focused Large-Cap Fund (Transferor Scheme) Thus, the exit load shall continue to apply as per the Transferor Scheme and the period of holding for the purpose of charging exit load will be computed from the original date of allotment of such units in the Transferor Scheme. However, the period of holding in the Transferee Scheme for the purpose of taxation will be computed from the date of merger.

The same is explained below:
(i) SIP (Systematic Investment Plan)/ MICRO SIP – Will continue in HDFC Equity Fund as per the registration period.
(ii) STP (Systematic Transfer Plan)/ Flex STP/ Swing STP – Will be ceased after June 20, 2014.
(iii) SWP (Systematic Withdrawal Plan) – Will be ceased after June 20, 2014.
(iv) Flex Index Plan - Will be ceased after June 20, 2014.
(v) Dividend Transfer Plans (DTPs) - Will be ceased after June 20, 2014.
 

You can discontinue the facility by giving thirty days written notice to any of our nearest Investor Service Centres
 

You need to submit a new registration form for the scheme - HDFC Equity Fund if you wish to continue with aforementioned registrations.
 

Yes
 

 

 

You can discontinue the facility by giving a written cancellation request to any of our nearest Investor Service Centres.
 

After June 20, 2014, an account statement, reflecting the units of HDFC Equity Fund allotted, will be dispatched to you. Additionally, SMS/ email will also be sent to you as per the registered mobile number/ email ID registered in the folio.

No. The Minor to Major updation request needs to be submitted. On updation of the same, the unit holder needs to submit the redemption /switch request during the Exit Option Period.
 

 

 

 

Yes.
 

The NAV details will be available on our website. Please click here to access the same. Alternatively, you can call us at our toll-free numbers - 1800 3010 6767/ 1800 419 7676.
 

Yes.

Please submit the request for reissue / revalidation of instruments towards unclaimed redemption / dividend along with the cheque at Computer Age Management Services Private Limited (CAMS), the registrar to the HDFC Mutual Fund Schemes or at any of our nearest Investor Service Centres
 

 

 

 

Please contact us on our toll free numbers - 1800 3010 6767/ 1800 419 7676 or visit any of our nearest Investor Service Centres.
 

Please click here to download the “Change in Bank details” form and to refer the procedure required for change in bank details in your folio. On confirmation of new bank details updation in your folio, you may submit the redemption request. Please ensure that the changes and redemption request is received by us within the aforementioned exit option period. For any more details you may contact any of our Investor Service Centres, or call us on our toll free numbers - 1800 3010 6767/ 1800 419 7676.
 

If you are KYC Compliant, please click here to download the “KYC (Know Your Customer) change details form” and to refer the procedure required for the change in address. If you are not KYC Compliant, please click here to download the “Change in Address” form and to refer the procedure required for new address updation Please ensure that the address updation and redemption request is received by us within the aforementioned exit option period. For any more details, you may contact any of our Investor Service Centres, or call us on our toll free numbers - 1800 3010 6767/ 1800 419 7676.
 

Yes. The units under HDFC Focused Large-Cap Fund will be transferred into HDFC Equity Fund irrespective of the KYC status. However, for subsequent investments, you need to compulsorily submit the required documents for KYC Compliance. For any more details, you may contact any of our Investor Service Centres, or call us on our toll free numbers - 1800 3010 6767/ 1800 419 7676.
 

Yes, as your DP will be intimated about the changes. An allotment advice will be sent to you after June 20, 2014.
 

You need to submit the request to your DP (Depository Participant) upto 3.00 p. m. on June 20, 2014, if you wish to exit from the schemes.
 

Yes, as your Channel distributor will be intimated about the changes. Further, if you wish to exit from the scheme, you may submit the request either at our Investor Service Centres or contact your Channel distributor for the same.

The allotment of units is explained with the help of the following illustration:

NAV of HDFC Focused Large-Cap Fund as on the last date of the Exit Option Period	(A)	15/- per unit
Units outstanding in HDFC Focused Large-Cap Fund as on the last date of the Exit Option Period	(B)	200 units
Outstanding value in HDFC Focused Large-Cap Fund before merger	(C) = (A) X (B)	(C) = (A) X (B)
NAV of HDFC Equity Fund as on the last date of the Exit Option Period	(D)	20/- per unit
Allotment of units in HDFC Equity Fund	(E) = (C) / (D)	150 units
Value of merged units	(F) = (D) X (E)	3000

Disclaimer: Please note that the aforesaid is only an illustration and the actual number of units to be allotted under HDFC Equity Fund will be determined by the value of units held in HDFC Focused Large-Cap Fund and the NAVs of HDFC Focused Large-Cap Fund and HDFC Equity Fund on the last date of the Exit Option Period which is June 20, 2014. Impact of tax on capital gains, if any, has not been considered in the above illustration. Further, in case of Non Resident Indians (NRIs), tax, if any, at applicable rates will be deducted and units for the residual value will be issued in HDFC Equity Fund. As the Securities Transaction Tax (STT) on extinguishment of units under HDFC Focused Large-Cap Fund shall be borne by HDFC AMC, the total value of unit holding of an investor will not be impacted on account of STT.

You may contact any of our nearest Investor Service Centres. Alternatively, you can also call us on our toll free numbers - 1800 3010 6767/ 1800 419 7676.