What is the regulatory status and standard industry practice regarding the monthly Fund Factsheet published by Asset Management Companies?

[ A ]It is a non-mandatory, voluntary marketing and information document published monthly under AMFI best practice guidelines, containing scheme AUM, NAV, top holdings, ratios, and fund manager commentary.[ CORRECT ]

[ B ]It is a legally binding contract created by the Ministry of Finance that replaces the Scheme Information Document.

[ C ]It is a classified internal memo distributed exclusively to credit rating agencies.

[ D ]It is an annual tax return submitted by unitholders to the Income Tax Department.

Takeaway

Option A is correct: It is a non-mandatory, voluntary marketing and information document published monthly under AMFI best practice guidelines, containing scheme AUM, NAV, top holdings, ratios, and fund manager commentary.

Derivation

While publishing a monthly Fund Factsheet is not a statutory requirement under SEBI regulations, it is an established industry-wide market practice followed voluntarily by AMCs under AMFI best practice guidelines. The factsheet provides investors, distributors, and analysts with vital monthly updates, including AUM, NAV, benchmark performance, portfolio sector weights, top 10 holdings, P/E, Beta, Modified Duration, and market commentary. This tests understanding of voluntary vs mandatory disclosures. A common error is assuming factsheets are statutory offer documents.

Why the others fail

B — It is a legally binding contract created by the Ministry of Finance that replaces the Scheme Information Document.

The factsheet is an informational document and does not replace the statutory Scheme Information Document (SID) or SAI.

C — It is a classified internal memo distributed exclusively to credit rating agencies.

Factsheets are public documents openly accessible to all investors, distributors, and researchers on AMC websites.

D — It is an annual tax return submitted by unitholders to the Income Tax Department.

Factsheets are published by AMCs to report scheme data, not personal tax returns filed by individual unitholders.