Monarch Mutual Fund has filed a draft Scheme Information Document with SEBI for its first scheme — an overnight fund investing in debt and money market securities maturing within one business day. The move marks the AMC's formal entry into India's mutual fund space. Overnight funds are among the lowest-risk open-ended debt categories, offering high liquidity. The draft filing triggers SEBI's review process before the fund can be launched commercially.

An overnight fund is an open-ended debt scheme that invests exclusively in securities with a residual maturity of one day — typically overnight reverse repos, CBLOs, or similar instruments. SEBI's categorisation circular (October 2017) defines overnight funds as one of the mandated categories under debt mutual funds, with the specific mandate that the portfolio must hold only overnight securities.

Before launching any scheme, an AMC must file a draft Scheme Information Document (SID) with SEBI. The SID contains the scheme's investment objective, asset allocation pattern, risk factors, benchmark, fund manager details, and exit load structure. SEBI reviews the SID and may issue observations before the AMC can open the NFO (New Fund Offer).

For a new AMC like Monarch, the maiden scheme filing is significant: SEBI's mutual fund regulations (SEBI (Mutual Funds) Regulations, 1996) require a minimum net worth of ₹50 crore for an AMC to be registered and to launch schemes. The registering authority for mutual funds — including both the trust and the AMC — is SEBI itself.

Overnight funds are relevant in the regulatory context because they carry minimal credit risk, interest rate risk, and liquidity risk, making them compliant with conservative treasury management mandates. Their benchmark is typically the CRISIL Overnight Index or similar one-day rate indices. The SID simplification exercise undertaken by SEBI from April 2024 changed the format of these documents to improve investor readability.