NISM Series V-B · Chapter 5
Scheme Related Information
This original lesson is awaiting subject-matter review. If something looks wrong, tell us through the contact page.
Before investing, an investor should be able to find out exactly what a scheme does, what it costs and how risky it is. This chapter covers the documents that carry this information, how often they are updated, and the ongoing disclosures (NAV, expenses, risk-o-meter, portfolio) that funds must publish.
1The scheme documents and caveat emptor
Three documents together are called the scheme related documents:
- SID (Scheme Information Document): everything about one scheme.
- SAI (Statement of Additional Information): information common to all schemes of the fund house.
- KIM (Key Information Memorandum): a short summary of the SID and SAI.
SEBI vets these documents and gives its observations, but it does not approve them or guarantee the scheme. The principle of caveat emptor ("let the buyer beware") means the investor is presumed to have read the documents and cannot later claim ignorance of anything disclosed in them. Final documents are published on the AMFI and AMC websites.
Exam trap SEBI does not approve or guarantee a scheme; it only vets the documents. Factsheets and annual reports are not "scheme related documents".
Example The SID clearly states a 1% exit load within one year. An investor who redeems after six months cannot later say he was not told; he is presumed to have read it.
Remember
- SID + SAI + KIM = scheme related documents.
- SEBI vets, does not approve.
2Scheme Information Document (SID)
The SID describes one scheme in detail: its objective, asset allocation, investment strategy, risk factors, fundamental attributes, plans and options, loads, and the benchmark. The risk-o-meter appears on the front page, along with a statement about who the scheme is suitable for.
A scheme's fundamental attributes are: (i) the type of scheme, (ii) the investment objective and asset allocation, and (iii) the terms of issue, such as liquidity, fees and expenses, and any guarantee. Changing any of these needs written communication to every unitholder and an exit option at NAV without exit load.
Example A large-cap fund wants to become a flexi-cap fund. That changes its type and asset allocation, so every investor must be told in writing and given the chance to exit without load.
Remember
- Risk-o-meter on the SID's front page.
- Fundamental attributes: type, objective/asset allocation, terms of issue.
3Statement of Additional Information (SAI)
The SAI contains information that is the same for all schemes of a fund house: details of the sponsor, trustees and AMC, investors' rights, valuation norms, tax rules and legal information. Legally the SAI is part of the SID, even though it is published separately.
Example Details of the trustee company's board, the valuation policy and investors' rights are the same for all 40 schemes of a fund house, so they sit once in the SAI instead of being repeated in 40 SIDs.
Remember
- SAI = common information; legally part of the SID.
4Key Information Memorandum (KIM)
The KIM is a summary of the SID and SAI, written so investors can quickly understand the essentials. Every application form must be accompanied by a KIM.
Exam trap The document attached to every application form is the KIM, not the full SID, the SAI or the factsheet.
Example A distributor hands a client an application form for a flexi cap fund. The KIM for that scheme must be attached to the form, so the client has the key facts before signing.
Remember
- KIM must accompany every application form.
5Addendum
When something changes between regular updates (for example, a new exit load), the fund issues an addendum. It becomes part of the scheme documents, and is attached to the KIMs and SIDs already printed until they are reprinted.
Example An AMC changes its exit load from 1% to 0.5%. It attaches an addendum with the new load to all KIMs and SIDs in stock until the documents are updated.
Remember
- Addendum = interim change; attached to printed documents in stock.
6How often documents are updated
| Document | Update requirement |
|---|---|
| SID | Within 1 month of the end of each half-year; also right after the exit window (at least 30 days) when fundamental attributes change |
| SAI | Within 3 months of the end of each financial year; material changes updated on an ongoing basis |
| KIM | At least once every half-year, within 1 month of the half-year end |
Example For the half-year ending 30 September, the SID and KIM must be updated by 31 October. The SAI for the year ending 31 March must be updated by 30 June.
Remember
- SID and KIM: half-yearly. SAI: yearly (plus material changes).
7Ongoing disclosures
Funds must keep investors informed on a regular schedule:
- NAV: every business day on the AMC and AMFI websites.
- Total Expense Ratio (TER): disclosed daily, scheme-wise and date-wise. TER = Base Expense Ratio + brokerage cost + transaction cost + statutory levies (such as GST). Each expense item above 10% of total expenditure is shown separately in the accounts.
- Risk-o-meter: 6 levels from Low to Very High, reviewed monthly. It is a starting point for choosing a scheme, not a prediction of returns.
- Portfolio: monthly and half-yearly, within 10 days; debt schemes fortnightly within 5 days. SIF portfolios every alternate month-end.
- Half-yearly results: unaudited results within one month of the half-year end.
- Annual report: within 4 months of the financial year end.
- SIF strategies use a 5-level Risk-Band instead of the risk-o-meter.
Example On Monday morning, an investor can look up Friday's NAV and the scheme's current TER on the AMC website, and the latest fortnightly portfolio if it is a debt fund.
Exam trap TER is disclosed daily, not monthly. Debt portfolios are disclosed fortnightly; equity portfolios monthly.
Remember
- NAV daily; TER daily; risk-o-meter monthly.
- Portfolio: monthly (debt fortnightly, within 5 days).
8Non-mandatory disclosures
Some documents are useful but not compulsory. The most common is the monthly factsheet, which shows the portfolio, returns, fund manager details and risk ratios. It is voluntary, but anything in it must still follow the advertising rules.
Exam trap The factsheet is not a statutory document; the SID, SAI and KIM are.
Example A fund house's monthly factsheet shows a scheme's top 10 holdings and returns. Because it may influence investors, it must follow the advertising rules, even though publishing it is voluntary.
Remember
- Factsheet: voluntary, but subject to the advertising code.
Original summary written by Integrato Digital to complement the official NISM workbook (March 2026 version). Read the workbook for the full text.