Baroda Mutual Fund and BNP Paribas Mutual Fund recently announced a merger of their mutual fund businesses. The proposal awaits the approval of the Securities and Exchange Board of India (Sebi). But does a merger of mutual funds impact investors?
It does since there will be a change of management once the merger is complete. A merger between two mutual funds may also mean a merger of schemes as both may have similar schemes. Post Sebi’s scheme categorization rules, mutual funds can have only one open-ended scheme in each category, and the merged entity will have to take steps to merge schemes that fall in the same category.
