SEBI Mutual fund categorization circular 6th October 2017. Here's a quick snapshot for your understanding.

1. SEBI'S NEW GUIDELINES
MUTUAL FUND CATEGORIZATION
AND RATIONALIZATION
5
1
2 6
3
36
NOW More than 2500 primary schemes
No clear-cut definition on fund category
No clear definition for Market-cap
No clear investment objective
Total confusion to the investor on schemes
Now the schemes are broadly
classified into 5 groups:
Equity Schemes
Debt Schemes
Hybrid Schemes
Solution oriented schemes
Other schemes
5 GROUP OF SCHEMES
The market capitalization of the companies
are clearly defined into three categories
in terms of full market capitalization:
Large-Cap- 1st-100th Company
Mid-Cap- 101st-250th Company
Small-Cap- 251st company onward
3 MARKET CAPITALIZATION
AMFI publishes the list of Market-Cap on
its website every 6 months. The list is
prepared based on the data
as on the end of June and December and
will be updated within 5 calendar days
from the end of the period. All
Mutual Funds should adopt to this list.
EVERY 6 MONTHS
All the AMCs are required to combine
and realign their schemes with due
approvals and submit their proposal to
SEBI not later than 2 months from
06th Oct 2017. If any subsequent
observation are made, then that should
be cleared with in a maximum period
of 3months from the date of such
observation.
2 MONTHS PERIOD
The 5 groups are now categorized
into 36 types of schemes:
Equity - 10 schemes
Debt - 16 schemes
Hybrid - 6 schemes
Solution oriented - 2 schemes
Other - 2 schemes
36 TYPES OF SCHEMES
Only one scheme per category for
each AMC will be allowed, with exception
in Index Funds/ETFs, Fund of Funds and
Sectoral/Thematic funds with no limit.
1 SCHEME PER CATEGORY
Pros: Clear definition on Fund categorization
Easy to compare the investor's objective with the funds objective
More transparency on fund management and its objective.
Cons:
Difficulty in fund management due to higher AUM
Reduction in the alpha potential of the fund due to higher diversification.