Baroda BNP Paribas Medium Duration Fund is an open ended medium term debt scheme investing in instruments such that the Macaulay duration of the portfolio is between three and four years with a relatively high interest rate risk and moderate credit risk scheme. Baroda BNP Paribas Credit Risk Fund is an open-ended debt scheme predominantly investing in AA and below rated corporate bonds (excluding AA+ rated corporate bonds) with a relatively high interest rate risk and relatively high credit risk.
The merger of these two schemes will be effective from September 11. Individual communication is also being sent to existing unitholders of both schemes over email, wherever email ID is available. As a result of the merger, no new scheme will come into effect.
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The proposed merger will be considered as a change in the fundamental attributes of the merging and surviving scheme, in terms of Regulation 18(15A) of SEBI (Mutual Funds) Regulations. In this regard, unitholders of both schemes will be given 30 days written notice of the merger and provided an option to exit the scheme(s) with no exit load, during the Exit Window Period, which commences from August 12 to September 10 both days inclusive.
The merging scheme (Baroda BNP Paribas Medium Duration Fund) will cease from the effective date and the unit holders of the merging scheme as of close of business hours will be allotted units under the corresponding available option of the surviving scheme (Baroda BNP Paribas Credit Risk Fund) at the last available Net Asset Value (NAV) or at the Face Value (in case there are no units in the corresponding option of Surviving scheme). This will also include any investments received in the merging scheme during the exit window period.The units allotted to the unit holders in the surviving scheme shall be treated as fresh subscriptions in the surviving scheme. Further, the date of allotment at the time of subscription in the merging scheme shall be considered as the allotment date for the purpose of applicability of the exit load period at the time of redemption of such units from the surviving scheme. Upon merger, there will be no change in the investment objective, asset allocation, investment pattern, annual scheme recurring expenses, or any other provisions as contained in the scheme information document (SID) of the surviving scheme.
Unit holders of the merging and surviving scheme may note that no action is required in case they are in agreement with the merger. The offer to exit at no exit load during the exit window period is purely optional and not compulsory, and exercise is at the discretion of the unitholder.
The existing unitholders under the scheme(s) who do not consent to the above merger, are entitled to exit the scheme(s) between August 12, 2024 to September 10, 2024 (both days inclusive) upto 3.00 p.m. at applicable NAV without any exit load, if any.
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Any tax consequences, arising out of exercise of exit option during the exit window period hereunder, shall be borne by the investor in line with the relevant provisions, as have been set forth in the Statement of Additional Information(SAI) / Scheme Information Document(SID) / Key Information Memorandum (KIM) of Baroda BNP Paribas Mutual Fund.
Unitholders who do not exercise the exit option on or before September 10, 2024 would be deemed to have consented to the proposed change.
As per section 47(xviii) of Income Tax Act, 1961, any transfer of units held by the unit holders in the merging scheme, in consideration of allotment of units in the surviving scheme, shall not be regarded as a taxable transfer, provided that the merger is of two or more schemes of an equity-oriented fund or two or more schemes of a fund other than equity-oriented fund.
Redemption / switch-out of units from the schemes may entail capital gain/loss or business income/ loss, as the case may be, in the hands of the unit holder. TDS shall be deducted in accordance with applicable tax laws for redemption/switch-out of units from the schemes and the same would be required to be borne by such unit holders. Securities Transaction tax (STT) or stamp duty, if applicable, on account of the merger will be borne by the AMC.
All other features, terms and conditions of the scheme(s), as stated in the SID and KIM of the scheme(s), read with the addenda issued from time to time, remain unchanged.