AMFI To Represent Industry Concerns To SEBI Over Discontinuation Of Retirement And Children’s Funds

The Association of Mutual Funds in India (AMFI) will make a formal representation to the Securities and Exchange Board of India (SEBI) regarding the regulator’s proposal to discontinue retirement and children’s mutual fund categories, AMFI Chief Executive Venkat Chalasani said during a call discussing the industry’s monthly data.

Invest in Indian Markets and Unlock Future Potential With 5paisa!

Open Account Now

The proposal follows SEBI’s recent introduction of a new “Life Cycle Fund” category as part of changes to the mutual fund categorisation framework.

According to industry data, retirement and children’s mutual fund categories currently have around 62–63 lakh investor folios with combined assets of approximately ₹57,000 crore.

SEBI Introduces Life Cycle Fund Category

SEBI recently announced a revised mutual fund categorisation framework that includes the introduction of a new life cycle fund category.

The regulator said the new category has been introduced to meet long-term financial goals such as retirement planning and education planning for children through a structured investment route.

As part of the revised framework, SEBI proposed discontinuing the existing retirement and children’s fund categories, stating that the life cycle structure could serve similar investment objectives.

The revised framework was introduced on February 26 as part of broader changes to the mutual fund classification system.

Industry Raises Concerns Over Proposal

AMFI has indicated that the industry has certain concerns regarding the proposed changes.

Speaking during the call, Chalasani said the industry body had already conveyed its reservations to the regulator.

According to him, SEBI believes the life cycle fund category could address the objectives of both retirement and children’s funds.

However, AMFI highlighted that the transition may create operational and structural challenges for asset management companies and investors. The industry body is now preparing a formal representation outlining these concerns.

Regulator Reviewing Industry Feedback

SEBI has said it would consider the views of the mutual fund industry on the proposed changes.

SEBI Chair Tuhin Kanta Pandey earlier said that the regulator would review issues raised by industry participants, including tax implications, costs related to scheme mergers, and operational aspects of life cycle funds.

The February 26 overhaul of the mutual fund categorisation framework also introduced restrictions aimed at reducing portfolio overlap across schemes.

The proposed changes are intended to streamline mutual fund offerings and improve clarity in scheme classifications across the industry.

AMFI said it will submit its representation to SEBI and await the regulator’s final decision regarding the future structure of retirement and children’s mutual fund categories.