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FAQs - Direct & Regular Plans


As per SEBI Mutual Funds Regulations, all Mutual Funds/Asset Management Companies (AMCs) shall provide a separate plan for direct investments made through the mutual fund/AMC i.e. investments NOT routed through a distributor.

If you invest in a mutual fund scheme directly from an AMC without involving or routing the investment through a mutual fund distributor, then you are purchasing the “Direct Plan” of that scheme. Direct Plan can only be bought through the following:
  • Online via the AMC's official website/AMC’s official mobile applications, if any,
  • offline by visiting AMC’s office/AMC Official Point of Acceptance/Registrar’s Investor Service Centres or
  • by contacting a SEBI Registered Investment Advisor (RIA).

When you invest in a mutual fund scheme through a Mutual Fund Distributor (MFD), then you invest in the “Regular Plan” of the scheme.

Since Direct Plans are bought directly from the Asset Management Company (AMC) without involving a distributor, the 'Direct Plan' has a lower Total Expense Ratio (TER) as compared to the 'Regular Plan' of the same scheme, as there is no commission to be paid to the distributor under Direct plan.

The higher Total Expense Ratio (TER) in Regular Plan, (due to inclusion of distributors’ commission), leads to a lower Net Asset Value (NAV) as compared to Direct Plan. Since no distributor is involved in Direct Plan, it has a comparatively lower TER & a higher NAV.

No, both Direct and Regular plans belong to the same mutual fund scheme, share the same portfolio, and are managed by the same fund manager.

RIA stands for Registered Investment Advisor. MFD is a Mutual Fund Distributor.

Feature RIA MFD
Primary Role Offer comprehensive financial planning and investment advice considering the client’s financial goals Sell mutual fund schemes to investors while considering the principle of appropriateness, i.e., best suited for investors within a defined upper ceiling of risk appetite
Primary Focus Providing personalised investment advice Facilitating the investment process
Compensation Receives Fee by the investor for advisory services Receives commissions from mutual fund/AMC subject to SEBI MF regulations
MF Scheme Plans Offered
  • RIA: Direct Plan only
  • RIA (stockbroker) who is a member of BSE with an INZ SEBI registration: Direct Plan only
  • RIA (stockbroker) holding a separate ARN code: Only Direct Plan under RIA-code, Only Regular Plan under ARN-code
 Regular Plan only
Regulation Registered with SEBI as Registered Investment Advisors (RIA) Registered with AMFI, comply with SEBI regulations and AMFI Code of Conduct for Mutual Fund Distributors
Disclosure Requirements Must adhere to fiduciary standards and act in clients’ best interests Must disclose commissions and potential conflicts

Direct and Regular Plans are available for all PPFAS Mutual Fund schemes. The options/sub-options available for each scheme are as mentioned below:

Scheme Growth Income Distribution cum Withdrawal (IDCW)
IDCW Payout IDCW Reinvestment
Monthly Daily Weekly Monthly
Core Equity
Parag Parikh Flexi Cap Fund (PPFCF) ✅ ❌ ❌ ❌ ❌
Parag Parikh ELSS Tax Saver Fund (PPTSF) ✅ ❌ ❌ ❌ ❌
Hybrid
Parag Parikh Conservative Hybrid Fund (PPCHF) ✅ ✅ ❌ ❌ ✅
Parag Parikh Dynamic Asset Allocation Fund (PPDAAF) ✅ ✅ ❌ ❌ ✅
Cash Management
Parag Parikh Arbitrage Fund (PPAF) ✅ ❌ ❌ ❌ ❌
Parag Parikh Liquid Fund (PPLF) ✅ ✅ ✅ ✅ ✅

Investments under Direct Plan can be made through the offline as well as online modes. However, such applications should not be routed through any broker/distributor.

Offline:

You must indicate the Scheme Name followed by the words “Direct Plan”. For example – Parag Parikh Flexi Cap Fund - Direct Plan. Additionally, you should mention “Direct” in the ARN column of the application form.

Online:

  • If you have routed your initial investment through a distributor, any additional investment will automatically be routed through the Regular Plan.
  • If you wish to invest through the Direct Plan, click on the “Direct Plan” option before proceeding. This will be treated as a fresh investment in a new folio.

    • In this scenario, the units will be allotted under the “Direct Plan” of the scheme.

    In this scenario, the distributor code will be ignored and the units for the investment will be allotted under the default option, i.e., Direct Plan.

    You will be required to submit a switch request for transferring of units from “Regular Plan” to “Direct Plan”. Ensure that all details, including folio number, scheme name, and relevant details to be filled, are correctly mentioned as required by you.

    Please note that even though the exit load is not applicable for such switches, however it may entail tax consequences. Investors should consult their tax advisor before initiating such requests.

    In this scenario, the units will be processed in the 'Regular Plan' of the target switch-in scheme (Scheme B) with the latest/last transacted broker.

    Please note that such switches may entail exit load as per the exiting scheme’s scheme information document (SID) /tax consequences. Investors should consult their tax advisor before initiating such requests.

    No exit load will be levied on inter-plan switches (Regular to Direct and Direct to Regular). Please note that even though the exit load is not applicable for such switches, it may entail tax consequences. Investors should consult their tax advisor before initiating such switch requests.

    When switching from a Regular Plan to a Direct Plan within the same mutual fund, the Net Asset Value (NAV) applied to both the switch-out (Regular Plan) and switch-in (Direct Plan) transactions is of the same day. This NAV is determined based on the first business day following the receipt of the switch request. If the request is submitted after the cut-off time, the NAV of the next business day will be applicable.

    This is not allowed since investments made under the 'Direct Plan' cannot be routed through a distributor code.
    Yes, in this case, the request will be processed for units in the Regular Plan. If you wish to submit a redemption/switch-out request for units in the Direct Plan, 'Direct Plan' must clearly be mentioned on the request.
    In this case, you have to submit two separate redemption/switch-out requests, one for each plan.
    Yes, in this case, the request will be processed for units in the plan in which they are available. However, it is always advisable to explicitly mention the plan in your request.
    In this case, if you have already invested in the Direct Plan of that scheme, then the “minimum additional purchase amount” is applicable. If this purchase/switch-in into the Direct Plan of the same scheme is a fresh purchase, then the “minimum investment amount” will be applicable. These will be based on the minimum limit prevailing at that time.

    Since the NAV for 'Direct Plan' and 'Regular Plan' under the same scheme will be different, any modification in the requests already processed (for example – addition/deletion of broker code) will not be processed. . To make changes, you will need to submit a switch request.

    Please note that even though the exit load is not applicable for such switches, it may entail tax consequences. Investors should consult their tax advisor before initiating such requests.

    ARN/EUIN remediation is allowed within 30 days of completion of the transaction based on investor's written request.

    Since the NAVs in the 'Direct Plan' and 'Regular Plan' of a scheme are different, requests for addition/deletion of broker code cannot be processed. You will have to submit a switch request from the 'Direct Plan' to the 'Regular Plan'.

    Please note that even though the exit load is not applicable for such switches, it may entail tax consequences. Investors should consult their tax advisor before initiating such requests.

    Since the Net Asset Value (NAVs) in the 'Direct Plan' and 'Regular Plan' of a scheme are different, requests for addition/deletion of broker code cannot be processed. To make this change, you will have to submit a switch request from the 'Regular Plan' to the 'Direct Plan'.

    Please note that even though the exit load is not applicable for such switches, however, it may entail tax consequences. Investors should consult their tax advisor before initiating such requests.


    The information contained in this document is for general purposes only and not an investment advice. Readers should seek professional advice from their investment or tax advisor before taking any investment related decisions.