SAI and SID : the twins of Offer Document!!

23 May 2008 gave a big push to the MF industry by announcing the split of repeated informations and scheme specific informations submitted to the SEBI through the Offer Document (OD)by the MFs on launching the schemes.The MF Regulations 1996 envisaged an Offer Document but the clarity was brought in 1998 with standardised Offer Document and Key Information Memmorandum that made a distinguishion between information provided by the MF and the information collected from the Investor respectively.After 10 years, SEBI has moved one step forward in splitting the OD into SAI and SID. SAI stands for Statement of Additional Information that deals with relatiovely stable information like Sponsor, Trustee, Banks, Auditirs, Fund Manager, Chief Operating Officer, Compliance Officer, etc.. about fund constituents, rights and duties of the investor, tax and legal matters and the MF risk clause.SID consists of all that is required to be known about the specific scheme. Type of scheme :Equity, Debt or Call Money ; Portfolio related information like the proportionof these asset classes, Whether large Cap/Mid cap or small cap; Managed in aggressive or passive or defensive style etc.. ; It also provides information as to minimum and maximum investments etc..KIM continues to retain all its previous characteristics: Informations from the investor and all that instructions for filing it in proper manner and place. His Name, Address.... Payment detailsChanges in ODPreviously OD was revised every two years. Addendum got circulated with OD and KIM. In the new system, Addendum shall be attached to existing SID and KIM till stocks are exhausted. Within 7 days of the change, SEBI needs to informed on the same . SID to be updated within 3 months from the end of the financial year.Same applies to KIM also. Additionally, public notice is to be given in one nation-wide English news paper and a vernacular Newspaper published from the place where the HQ of the MF is situated.This move help MFs to reduce recurring expenses of printing oft repeated items any time a scheme is launched. It is also expected to add speed in reaching the market with new products as certain market flavours remain very short on the scene.Customer is the King even in MFs!