HDFC Mutual Fund in a notice said that it will discontinue subscriptions in HDFC Long Term Advantage Fund from May 16, 2018. It is an equity-linked saving scheme and a tax-saving mutual fund scheme which manages Rs 1,515 crore at the moment.
The suspension move is as per Securities and Exchange Board of India's (Sebi) new guidelines on categories of funds that was released in October which directed fund houses to re-categorize all existing and future schemes into five broad categories and 36 sub-categories to bring ease in investing.
HDFC Mutual Fund has also informed investors of the future merger of this fund with another existing open-ended equity linked savings scheme. This existing scheme will be managed for the three more years.
"Investors are further requested to note that Equity-Linked Savings Scheme, 2005 guidelines mandate a lock-in period of three years from the date of allotment of units, therefore, it is proposed to continue to manage the scheme without accepting subscriptions for a period of three years with effect from May 16, 2018. Post completion of no subscription period, the scheme shall be merged with any of the existing open ended equity schemes of the fund after giving an exit option to the unit holders of the scheme," the notice said.