SEBI’s Changes in Mutual Fund Categorization and Rationalization
SEBI has issued a new circular on “Categorization and Rationalization of Mutual Fund Schemes” dated 26 February 2026, replacing the earlier scheme categorization framework in the Master Circular for Mutual Funds. The focus is on simplifying categories, reducing portfolio overlap, and ensuring schemes are true to their label so that investors find it easier to understand what they are investing in. Big Change: Children’s & Retirement Funds Category Discontinued The entire Solution Oriented Schemes category (which included Children’s Funds and Retirement Funds) has been discontinued with immediate effect. All existing schemes in this category must stop taking new investments and SIP registrations right away. These schemes will be merged into other schemes with similar asset allocation and risk profile, after SEBI’s approval. As of 31 January 2026, there were 15 Children’s Fund schemes and 29 Retirement New Scheme Buckets: 5 Broad Groups Fund schemes ...