Scheme Re-Opening Date
The date after an open-ended scheme's NFO from which investors can buy new units or sell units back to the scheme at NAV-based prices. Close-ended schemes have no re-opening date.
In plain language
A new open-ended scheme is launched through a New Fund Offer (NFO). For a period after the NFO closes, investors can neither buy more units from the fund nor sell them back. Then the scheme re-opens for continuous business.
The workbook lists three dates relevant for the NFO of an open-ended scheme: the NFO Open Date, the NFO Close Date, and the Scheme Re-Opening Date — the date from which investors can offer their units for re-purchase to the scheme (at the re-purchase price), or buy new units of the scheme (at the sale price). Upon re-opening the AMC does sale and re-purchase at NAV-based prices.
How it works
The life cycle around the date.
| Stage | Price | Rule from Chapter 9 |
|---|---|---|
| NFO open → NFO close | Face value, Rs 10 (entry load is banned) | NFOs other than ELSS stay open for a maximum of 15 days |
| After NFO close | — | Allotment within 5 business days; demat credit within 2 working days; account statement within 5 business days; refund of rejected applications within 5 business days, or interest at 15 percent a year for the delay |
| Scheme Re-Opening Date onwards | Applicable NAV — sale price and re-purchase price are NAV-based | Ongoing purchases, redemptions and switches, subject to cut-off timings |
Close-ended schemes are different. They have an NFO Open Date and an NFO Close Date but no Scheme Re-opening Date, because the scheme does not sell or re-purchase units. Investors buy or sell on the stock exchange where the scheme is listed.
Where the date is published. The KIM must show the dates of Issue Opening, Issue Closing and Re-opening for Sale and Re-purchase.
A worked example
A new open-ended equity scheme runs its NFO from 3 March to 14 March (12 days, within the 15-day limit). Dates and amounts are illustrative.
In the NFO. Sunita invests Rs 50,000 at the face value of Rs 10:
Units = 50,000 ÷ 10 = 5,000 units
Allotment is completed within 5 business days of 14 March.
Before re-opening. On 20 March she wants to add Rs 20,000, and her colleague wants to redeem. Neither can transact with the fund yet.
Re-opening, 28 March. The scheme re-opens with the NAV at Rs 10.40. Sunita's additional Rs 20,000 now buys units at the NAV:
Units = 20,000 ÷ 10.40 = 1,923.077 units
Her colleague can redeem at the applicable NAV from the same date.
If the same fund house had launched a close-ended FMP in March, there would be no 28 March for it — after its NFO, an investor wanting out would have to find a buyer on the exchange, often at a discount to NAV.
Why NISM asks about it
Chapter 9.1 (The NFO process) lists the three NFO dates for an open-ended scheme, and the classic question is which scheme type has no re-opening date — close-ended. Chapter 9.4 supplies the NFO pricing at Rs 10 and the 5-business-day allotment and refund rules, and Chapter 5.1.3 puts the re-opening date in the KIM.
Common exam traps
- Close-ended schemes have no Scheme Re-opening Date — after the NFO they trade only on the stock exchange.
- NFO price is face value (Rs 10); after re-opening, the price is NAV-based.
- NFOs other than ELSS: maximum 15 days. ELSS is the exception.
- Allotment within 5 business days of NFO close, and a late refund carries 15 percent interest a year.
- The re-opening date opens both doors — fresh purchases and re-purchases — not just redemptions.
Where this is taught
- Series V-A · Chapter 9: Investor Servicesintroduced here
- Series V-D · Chapter 9: Investor Servicesintroduced here
- Series V-B · Chapter 9: Investor Servicesintroduced here
Related terms
- Face valueThe denomination a company's capital is divided into and carried in its books — fixed, printed on the certificate, and the base on which dividend percentages and stock splits are computed.
- Net Asset ValueThe net assets of a mutual fund scheme divided by the number of units outstanding — what one unit of the scheme is worth on a given day, after every liability except the unitholders' own.
- Close-ended fundA mutual fund scheme that sells units only in its NFO, runs for a fixed period and redeems all units at maturity — in between, investors can exit only by selling on the stock exchange, where listing is compulsory.
- Cut-off timeThe SEBI-prescribed clock time that, read together with the time stamp on the request, decides which day's NAV a mutual fund transaction is priced at.
- Key Information MemorandumThe short summary of the SID and SAI that SEBI requires to accompany every mutual fund application form — the one scheme document an investor is guaranteed to be handed.
- New Fund OfferThe period in which a mutual fund scheme's units are offered to the public for the first time, at a fixed NFO price rather than at NAV, and during which the registrar builds the scheme's first register of investors.
- Open-ended fundA mutual fund scheme with no maturity date that keeps selling and redeeming units directly after its NFO, at NAV-linked prices, so its number of units and unit capital change every day.