PPFAS Mutual Fund :: What is a Direct Plan?

FAQs - Direct Plan

What is a 'Direct Plan'?
SEBI has directed Mutual Funds /AMC vide SEBI Circular no. CIR/IMD/DF/21/2012 dated September 13, 2012 to provide a separate plan for direct investments, i.e. investments not routed through a distributor, in existing as well as new schemes. Hence PPFAS Mutual Fund has launched separate plans under its flagship scheme Parag Parikh Long Term Value Fund, for direct investments called 'Direct Plan'.

Who can apply under the 'Direct Plan'?
Investments under the 'Direct Plan' are open to all categories of investors who choose to invest without routing the transaction via a distributor.

For how many plans will this be available?
All Plans / Options / Sub-Options offered by Parag Parikh Long Term Value Fund, will be eligible for subscription under the 'Direct Plan'. Thus, there shall be two plans available for subscription under the schemes viz. 'Regular Plan' and 'Direct Plan'.

Which modes are available for investing into 'Direct Plan'?
Investments under 'Direct Plan' can be made through the offline as well as online modes. However, such application should not be routed through any broker / distributor.

What is the difference between the ''Regular Plan'' and 'Direct Plan'?
The 'Direct Plan' has a lower expense ratio as compared to 'Regular Plan' in the same scheme, as there is no commission to be paid to the distributor under this plan.

Is there a difference in the NAVs between the two plans?
Yes. Since there is a difference in the expenses charged by the 'Direct Plan' and 'Regular Plan' under the scheme, there will be a difference in the NAVs for both these Plans.

Will the scheme portfolio change in the 'Direct Plan'?
No, the scheme portfolio will be the same for both the plans.

Will the scheme characteristics change in the 'Direct Plan'?
No. All scheme features and characteristics will be the same.

How can I invest in 'Direct Plan'?
Offline investors subscribing under 'Direct Plan' of our scheme will have to indicate the Scheme Name followed by the words 'Direct Plan'. For example, Parag Parikh Long Term Value Fund - Direct Plan'. Additionally, investors should mention “Direct" in the ARN column of the application form.

Online investors have two options:
  • If they have routed their initial investment through a distributor, their additional investment will automatically be routed through the 'Regular Plan'.
  • If they wish to invest through the 'Direct Plan' they should click on the 'Direct Plan' option before proceeding. This will be treated as an investment in a new folio.
What will happen if I don’t mention 'Direct Plan' in the scheme name and also don’t mention broker code on my purchase request?
In this scenario, the units will be allotted under the 'Direct Plan' of the scheme. In such cases, the minimum additional application amount for the scheme will apply as the minimum investment amount for 'Direct Plan'.

What will happen in case the distributor code is mentioned in the application form, but 'Direct Plan' is indicated in the scheme name?
  In this scenario, the distributor code will be ignored and the units for the investment will be allotted under 'Direct Plan'. In such cases, the minimum additional application amount for the scheme will apply as the minimum investment amount for 'Direct Plan'.

I have routed my existing investments vide a distributor. I want my current investments to be transferred into the 'Direct Plan' of the same scheme. What should I do?
You will be required to submit a switch request for transferring of units from 'Regular Plan' to 'Direct Plan'.

If I submit a transaction slip with the words "Multiple Brokers" pre-printed on it and the words 'Direct Plan' are not mentioned in the name of the switch-in scheme, will the switch-in be processed into the 'Direct Plan' or "'Regular Plan'" switch-in scheme?
In this scenario, the units will be switched into the "'Regular Plan'" switch-in scheme irrespective of whether the units being switched are routed vide a broker or not. Please note that such switches may entail exit load / tax consequences. Investors should consult their tax advisor before initiating such requests.

Will exit load be charged if I switch my investments from "'Regular Plan'" to 'Direct Plan' and vice versa?
No exit load levied on inter-plan switches (Regular to Direct and vice-versa) w.e.f. 5th April 2016.

I want to switch my investments from 'Regular Plan' to 'Direct Plan'. What will be the NAV applicable for the switch-in scheme?
The NAV for the switch-in scheme will be as on the same date as that of the switch-out scheme.

My distributor does not want brokerage but wants to maintain his code under the 'Direct Plan' since he advised me about investing in the same. Is this allowed?
This is not allowed since investments made under the 'Direct Plan' cannot be routed through a distributor code.

If I hold units in the Existing as well as 'Direct Plan' of the same scheme and I submit a redemption / switch-out request without mentioning any specific plan, will my request be processed?
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.

If I hold units in the Existing as well as 'Direct Plan of ' and I wish to redeem / switch-out units from both plans, what should I mention on the redemption / switch-out request?
In this case, you have to submit two separate redemption / switch-out requests, one for each plan.

If I hold units in any one of the Plans of your scheme and I submit a redemption / switch-out request without mentioning any specific plan, will my request be processed?
Yes, in this case, the request will be processed for units in the plan in which they are available.

If I hold units in the 'Regular Plan' of your scheme and I want to submit a purchase / switch-in request into the 'Direct Plan', will I have to invest / switch the minimum investment amount for the switch-in scheme?
No, you may invest / switch the minimum additional application amount for investing into the 'Direct Plan' of the scheme. This will be based on the minimum limit prevailing at that time.

What will happen if there is a plan mismatch in the investment instrument and application?
The plan will be determined from the investment instrument.

I submitted purchase / switch transaction 2 days ago. I want to change my broker code to Direct or vice versa for that transaction. What should I do?
Since the NAV for 'Direct Plan' and "'Regular Plan'" under the same scheme will be different, any change in the requests already processed (for example – addition / deletion of broker code) will not be processed.

I forgot to add the distributor’s code to a purchase transaction that was processed yesterday. Can I submit a request for rectification?
Since the NAVs in the 'Direct Plan' and 'Regular Plan' of a scheme are different, requests for addition / deletion of broker code can not be processed. You will have to submit a switch request from the 'Direct Plan' to the 'Regular Plan'.

How can I add a distributor’s code to my existing investments in the 'Direct Plan'? 
Since the NAVs in the 'Direct Plan' and 'Regular Plan' of a scheme are different, requests for addition / deletion of broker code can not be processed. You will have to submit a switch request from the 'Direct Plan' to the 'Regular Plan'.

How can I remove my distributor’s code from my investments in the 'Regular Plan'?
Since the NAVs in the 'Direct Plan' and 'Regular Plan' of a scheme are different, requests for addition / deletion of broker code can not be processed. You will have to submit a switch request from the 'Regular Plan' to the 'Direct Plan'.

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