AMFI to Approach SEBI Over Proposal to Scrap Two MF Categories

On Monday, March 10, 2026, the Association of Mutual Funds in India (AMFI) chief Venkat Chalasani said that it is planning to submit a representation to the Securities and Exchange Board of India (SEBI) regarding the regulator’s proposal to discontinue the retirement and children’s mutual fund categories.

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Concerns Over Sudden Closure

AMFI chief stated that the representation will outline concerns from both investors and asset management companies about the abrupt decision to shut these two solution-oriented scheme categories. Together, the schemes manage more than ₹57,000 crore in assets, spanning 41 funds and over 6.2 million investor folios.

Industry participants have raised concerns that eliminating these categories could disrupt long-term financial planning for investors who specifically use them for retirement and children’s future expenses.

On February 26, SEBI instructed asset management companies (AMCs) to stop accepting new inflows into retirement and children’s funds with immediate effect. However, following a request from AMFI, the regulator later allowed investments to continue until March 31, 2026, giving the industry additional time to adjust.

Proposal to Merge with Similar Schemes

Under SEBI’s proposal, retirement and children’s funds may be merged with other schemes that have similar asset allocation and risk profiles. The move forms part of a broader regulatory plan to introduce a new category of life-cycle funds. The regulator believes life-cycle funds could serve the same long-term investment objectives while offering a more flexible structure.

Industry Flags Implementation Challenges

“SEBI is of the opinion that life-cycle funds will effectively address both retirement and children’s fund categories. However, we have communicated the industry’s concerns and pointed out that there could be certain implementation challenges,” Chalasani said.

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