Your SIP instalment left your bank account on the same date in April 2026 as it did in March. The same amount, the same scheme, the same units credited a couple of days later. Nothing on the screen looked different.
Underneath, the entire rulebook governing that scheme had been replaced.
Three separate things happened to Indian mutual funds in 2026. A new set of regulations took effect on 1 April, replacing a framework that had stood since 1996. The way scheme costs are calculated and shown was rebuilt. And the rules on what a fund must hold, and what it may call itself, were rewritten in February with a compliance deadline in late August.
If you run a SIP you have probably received two or three emails about this and read none of them. Most did not require anything from you. One kind does.
Nothing changed about how your SIP runs
Worth saying plainly first, because the coverage in early 2026 was loud enough to suggest otherwise.
The debit date is the same. The cut-off timing that decides which day’s NAV you get is the same. Units are credited against an instalment the same way. Registering a new SIP, stepping one up, and redeeming all work as they did.
Pausing remains subject to each fund house’s facility terms. SIP cancellation requests have been processed within two working days under SEBI’s December 2024 operational direction, reduced from the earlier ten-working-day timeline. A pause is temporary and the SIP restarts on its own. A cancellation means registering again, though your existing units stay invested either way.
What the 2026 framework changes is what the fund costs you, what it is required to hold, and what it is allowed to be called.
What changed in the cost line
Until 31 March 2026, a scheme’s reported expense ratio reflected a range of expenses and applicable levies under the earlier framework, including management and operating costs and certain transaction-related charges.
That had an odd consequence. Two schemes with identical management costs could show different expense ratios purely because one traded more often and paid more STT. The number moved for reasons that had nothing to do with the fund house.
From 1 April 2026 it is split. The Base Expense Ratio covers the fund’s permitted operating and management expenses. Statutory levies are charged on actuals and disclosed separately. The total cost can include the base expense ratio, permitted brokerage and transaction costs, and applicable statutory levies.
The caps came down too. SEBI lowered the maximum permissible ratios across asset-size slabs, mostly by around 10 basis points and by up to 15 in places, with further cuts for index funds, ETFs, fund of funds and closed-ended schemes. The brokerage a fund may charge on its own trades fell from 12 basis points to 6 in the cash market and from 5 to 2 in derivatives, excluding levies.
The cost cut is smaller than the headline
A brokerage cap moving from 12 basis points to 6 sounds like a halving. It is not. The old cap of 12 included statutory levies. Strip those out to make the figures comparable and the old effective brokerage component was closer to 8.6 basis points, with the derivatives figure closer to 3.9. The reduction is real, but it is roughly a third, not a half.
The same caution applies to the expense ratio. Your fund’s headline number will very likely look lower than it did in March 2026, because taxes that used to be inside it are now outside it. That is a change in presentation, not in what leaves your returns. SEBI has said as much, framing the reform as transparency rather than a deep cut in fees. Industry estimates of the actual saving cluster around 5 to 7 basis points.
A 6-basis-point reduction is 0.06% a year. The actual rupee saving depends on how much you have invested and for how long. It compounds, and over twenty years it is not nothing. It is also not a reason to switch funds.
What genuinely improves is comparison. A base expense ratio measures what a fund house charges to manage money, uncontaminated by how much tax the scheme happened to pay.
What changed inside the fund
The February 2026 categorisation circular is the change most likely to affect what you actually own.
Several equity categories now have to hold more equity. Dividend yield, value, contra and focused funds now have an 80% minimum equity allocation, increased from the earlier 65% category threshold. ELSS also has an 80% minimum under the 2026 framework. A fund sitting at 70 per cent has had to move.
Portfolio overlap is now capped. Sectoral and thematic schemes may not overlap more than 50 per cent with other equity schemes from the same fund house, and value and contra funds face the same limit against each other. Overlap is computed quarterly using the average of daily values. Sectoral and thematic schemes have three years to comply, and those that cannot are to be merged.
Scheme names must match the category, and words emphasising only the return a fund might produce are no longer allowed.
Two categories moved in opposite directions. The circular discontinued the solution-oriented scheme category and directed existing schemes to stop subscriptions and merge with a scheme having a similar asset allocation and risk profile, subject to prior approval. However, the Life Cycle Fund annexure also describes AMC options involving continuation of a Children’s Fund and/or Retirement Fund. The outcome is scheme-specific, so rely on your AMC’s notice for your scheme.
Why your scheme has a new name
Most of the categorisation rules carried a six-month compliance window from 26 February 2026. It closed on 26 August, which is why a wave of renaming emails landed in the last fortnight of that month.
One large fund house renamed nineteen schemes and revised the scheme-type description of twenty-three, effective 26 August. Another renamed several debt schemes from 25 August. The pattern was industry-wide and mostly cosmetic: an equity and debt fund became an aggressive hybrid fund, a regular savings fund became a conservative hybrid fund.
If you received one of these, there is nothing to do. The scheme, the manager, the portfolio, your units and the folio number are unchanged.
What is worth doing is reading which category the fund now sits in, because the new names are more literal than the old ones. A fund you thought of as balanced may now be labelled aggressive hybrid, which is an accurate description of something you may not have known you owned.
The group that does have to act
If your SIP runs into a retirement fund or a children’s fund, that is the case where the change reaches you.
The circular discontinues the category, directs subscriptions to stop and contemplates merger with a similar-allocation and similar-risk scheme with prior SEBI approval. Because Annexure I also sets out AMC continuation options, the outcome for investors is scheme-specific, so follow your AMC’s notice. Do not assume your SIP must stop without checking the relevant scheme notice.
Two things to do. Check whether your instalments are still going through, because a rejected debit on a scheme that has stopped accepting subscriptions can look like a bank failure. And when the merger notice arrives, read what the receiving scheme actually holds, because these funds were discontinued precisely because their portfolios resembled ordinary equity or hybrid funds.
Nomination, from 1 September 2026
Separately, a revised nomination framework took effect on 1 September 2026 covering both demat accounts and mutual fund folios.
Nomination is now mandatory for new single-holder folios, with an opt-out available through a standard declaration. You may name up to three nominees. Name and relationship are mandatory, and date of birth is also mandatory where a nominee is a minor. The witness requirement for a wet-signature nomination has been removed. For joint folios nomination is optional, but changing a nominee needs the consent of every joint holder. Where percentages are not specified, the holding splits equally and any odd unit goes to the first nominee.
If you have an old folio with no nominee, expect to be nudged about it. It takes a few minutes and it is the cheapest thing you can do for whoever has to deal with your investments later.
What to check on your own SIP
Five minutes, once, and then leave it alone.
Confirm the instalments are still being debited, particularly if you hold a retirement or children’s fund. Look at the scheme’s category rather than its name. Note the base expense ratio, and compare it against other funds rather than against last year’s bundled number. Check that a nominee is recorded. And if you hold two or three funds from the same house in adjacent categories, the overlap disclosures will tell you whether you have been buying the same portfolio twice.
None of this requires you to change anything. It tells you whether what you own is what you thought you owned.
Common questions
Do I need to re-register my SIP because of the new rules?
No. Existing SIP registrations, mandates and folios carry over. A scheme being renamed does not break the registration.
My fund’s expense ratio dropped in April. Am I paying less?
A little, but less than the drop suggests. Most of the fall is taxes moving out of the headline number rather than out of your returns. The genuine saving on a typical scheme is in the region of 5 to 7 basis points.
My scheme has a different name. Is it a different fund?
No. Renaming under the categorisation rules does not change the portfolio, the manager or your units. Verify the folio number matches and treat the new name as a more accurate label.
Can I still pause my SIP, and how long does cancelling take?
Pausing is unchanged, with limits on frequency and duration set by each fund house, and the SIP resumes automatically afterwards. Cancellation is processed within two working days under the December 2024 rule, so allow a few days before the next debit date rather than cancelling the day before.
What happens to my retirement fund SIP?
The scheme is expected to stop accepting fresh subscriptions and be merged into a comparable one, but the outcome is scheme-specific, so follow your AMC’s notice. Your existing units stay invested. Watch for the merger notice, which should carry a load-free exit window.
Is nomination compulsory now?
For a new single-holder folio, yes, with an opt-out available if you actively decline. For joint folios it remains optional.
Do these rules change how mutual funds are taxed?
No. Capital gains treatment and the tax on dividends are set under income tax law, not SEBI regulations, and were untouched by these changes.
Where this leaves your SIP
The 2026 rules did a lot to mutual funds and almost nothing to systematic investment plans.
Costs came down slightly and became far easier to compare. Categories became stricter, so a fund is more likely to hold what its name implies, and some names changed to say so. One category disappeared, and if you were in it you have a decision coming.
The instruction that follows is unglamorous. Read the category, not the name. Compare base expense ratios, not last year’s headline. Add a nominee. Then go back to ignoring the emails, which for a long-running SIP is usually the right response anyway.
Risk disclosure
Hem Finlease Private Limited, SEBI Registration No. INZ000167734. Hem Securities Limited, SEBI Reg. No. IN-DP-568-2021, CDSL: 17700/17701.
Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI and membership of recognised stock exchanges do not guarantee the performance of the intermediary or provide any assurance of returns to investors.
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