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Saraswati institute of front runners Venture by: ravish bhateja
H.O. NEAR OLD POST OFFICE BUILDING, MEHRAULI, NEW DELHI – 110030 BRANCH : T-55, WEST PATEL NAGAR, NEW DELHI – 110008 TEL NOS.: 9015667204, 9999001336 E-Mail- rbsifr754@gmail.com, ravishbhateja@gmail.com

Securities Law
Jain By CS Anurag
E-mail: allcsclub@gmail.com

SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997), allcsclub@gmail.com

Mutual fund means a fund established in the form of a trust o to raise monies through the sale of units to the public or a section of the public under one or more schemes  for investing in securities including money market instruments or gold or gold related instruments or real estate assets Public/Section of Public (Investors)

Sponsor creates Trust and appoint trustee after getting permission from SEBI AMC (in the name of trust) invest money collected from public in different securities, instruments etc. and distribute profits (earned from such investment) to the unit holders

Sche me 1

Sche me 1 AMC

Sche me 1

AMC (in the name of trust) raise/ collect money from public by launching different schemes and selling units of those schemes to public AMC may be appointed by sponsor or trustee. AMC charges fee for all the activities

TRUST

AMC

Invest in equity shares, debt instruments, money market, gold, real estate, infrastructure etc. depending upon the type of schemes

The Trustees role is not to manage the money but MEHRAULI, WEST money is being TEACHING CENTRES : to see, whether the PATEL NAGAR managed by AMC as TEL NOS. : 9015667204, 9999001336 per stated objectives of E-MAIL- ravishbhateja@gmail.com, Trust or not the Schemes and rbsifr754@gmail.com
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SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997), allcsclub@gmail.com

Advantage of Mutual Funds

Diversification: MF invest funds in different securities, industries etc. This reduce risk associated with any single security or industry Increased possibilities of high and consistent returns due to professional management and diversification

Professional Management by experienced and skilled fund managers

Low transaction cost compare to individual direct investment (eg: brokerage, custodial cost etc) High liquidity In open ended schemes investors can redeem the units any time and close ended schemes shall be listed on the stock exchange

Benefits of MF

Transparency as investors get regular updates on the value of their investments (NAV)

Schemes of MF

Schemes of Mutual Funds

CLOSE ENDED SCHEMES
TEACHING CENTRES : MEHRAULI, WEST PATEL NAGAR TEL NOS. : 9015667204, 9999001336 E-MAIL- ravishbhateja@gmail.com, rbsifr754@gmail.com Page |3

OPEN ENDED SCHEMES

allcsclub@gmail. rbsifr754@gmail.e.com Page |4 .market price on the stock exchange Mostly liquid Capital protection oriented schemea mutual fund scheme which endeavours to protect the capital invested therein through suitable orientation of its portfolio structure. 9999001336 E-MAIL.com Open-ended scheme Close-ended scheme a scheme of a mutual fund which offers units for A scheme of a mutual fund in which the period of sale without specifying any duration for redemption maturity of the scheme is specified Variable corpus: No.e. Gold exchange traded fund scheme mutual fund scheme that invests primarily in gold or gold related instruments Schemes of Mutual Funds Fund of funds scheme Money market mutual fund schema a scheme of a mutual fund which has been set up with the objective of investing exclusively in money market Real estate mutual fund scheme a mutual fund scheme that mainly invests in real estate assets a mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds Index fund scheme a mutual fund scheme that invests in securities in the same proportion as an index of securities TEACHING CENTRES : MEHRAULI.ravishbhateja@gmail. of units are not fixed here Under such schemes. : 9015667204. funds itself buy back the units and sell new units during the duration of schemes It is not mandatory to list units of such schemes on SE Units of such schemes may or may not be listed therefore units of such schemes may have only 1 price i.com.on the basis of NAV of schemes . .SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). of units are fixed here Under such schemes. funds do not buy back the units and sell new units during the duration of schemes It is not mandatory to list units of such schemes on SE Units of such schemes shall be listed therefore units of such schemes have 2 prices i. on the basis of NAV of schemes Highly liquid Fixed corpus: No. WEST PATEL NAGAR TEL NOS.

floats new schemes and manage these schemes by buying and selling securities. It is the AMC.com Page |5 . and also under the direction of the Trustees and SEBI.ravishbhateja@gmail. Trustees appoint the AMC. The AMC has to be approved by SEBI. Once the Trust is created. Sponsor is not the Trust.com STRUCTURE OF MUTUAL FUNDS IN INDIA Mutual Funds in India follow a 3-tier structure There is a Sponsor (the First tier).com. Contracts are entered into in the name of the Trustees. Once SEBI is convinced. whether the money is being managed as per stated objectives. to manage investor’s money. whether he has enough experience in the financial sector. It is the Trust which is the Mutual Fund.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). who thinks of starting a mutual fund. SEBI checks whether the person is of integrity. 9999001336 E-MAIL. The AMC functions under the supervision of it’s SEBI of Directors. the sponsor creates a Public Trust (the Second tier) as per the Indian Trusts Act. his net worth etc. i. - - WHO MANAGES INVESTOR’S MONEY? This is the role of the AMC (the Third tier). They are two separate entities. Sponsor is not the Mutual Fund. Not everyone can start a mutual fund.e. 1882. Trusts have no legal identity in India and cannot enter into contracts. which is the market regulator and also the regulator for mutual funds. - - TEACHING CENTRES : MEHRAULI. The Sponsor approaches the SEBI. The AMC in return charges a fee for the services provided and this fee is borne by the investors as it is deducted from the money collected from them. which in the name of the Trust. Trustees may be seen as the internal regulators of a mutual fund. It is important to understand the difference between the Sponsor and the Trust. rbsifr754@gmail. Their job is only to see. it is registered with SEBI after which this trust is known as the mutual fund. allcsclub@gmail. : 9015667204. The Trustees role is not to manage the money. The AMC’s SEBI of Directors must have at least 50% of Directors who are independent directors. WEST PATEL NAGAR TEL NOS. In order to do this the AMC needs to follow all rules and regulations prescribed by SEBI and as per the Investment Management Agreement it signs with the Trustees. hence the Trustees are the people authorized to act on behalf of the Trust.

com. allcsclub@gmail. : 9015667204. Risk involved in Mutual Funds TEACHING CENTRES : MEHRAULI. the permission of the Compliance Officer is a must. then senior executives like CEO. rbsifr754@gmail. This ensures that there is accountability and somebody is responsible for the OD.com If any fund manager.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). This certificate says that all the information provided inside the OD is true and correct. 9999001336 E-MAIL. after getting SEBI approval becomes the offer document of the scheme. The Offer Document (OD) is a legal document and investors rely upon the information provided in the OD for investing in the mutual fund scheme. analyst intends to buy/sell some securities. Whenever the fund intends to launch a new scheme. The Compliance Officer has to sign the Due Diligence Certificate in the OD.com Page |6 . This draft offer document.ravishbhateja@gmail. A compliance Officer is one of the most important persons in the AMC. The certificate ensures that the AMC takes responsibility of the OD and its contents. the AMC has to submit a Draft Offer Document to SEBI. Chairman of the AMC has to sign the due diligence certificate. In case there is no compliance officer. WEST PATEL NAGAR TEL NOS.

: 9015667204.com Page |7 . 9999001336 E-MAIL. rbsifr754@gmail. as may be specified by the SEBI from time to time Index fund scheme means TEACHING CENTRES : MEHRAULI. 1996 Mutual fund means a fund established in the form of a trust o to raise monies through the sale of units to the public or a section of the public under one or more schemes  for investing in securities including money market instruments or gold or gold related instruments or real estate assets Capital protection oriented scheme means a mutual fund scheme which endeavours to protect the capital invested therein through suitable orientation of its portfolio structure.com. Gold related instrument means such instrument having gold as underlying. Open-ended scheme means a scheme of a mutual fund which offers units for sale without specifying any duration for redemption Close-ended scheme means any scheme of a mutual fund in which the period of maturity of the scheme is specified Fund of funds scheme means a mutual fund scheme that invests primarily in other schemes of the same mutual fund or other mutual funds Gold exchange traded fund scheme shall mean a mutual fund scheme that invests primarily in gold or gold related instruments.ravishbhateja@gmail.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). WEST PATEL NAGAR TEL NOS. allcsclub@gmail.com SEBI (MUTUAL FUNDS) REGULATIONS.

establishes a mutual fund REGISTRATION OF MUTUAL FUND Application for registration An application for registration of a mutual fund shall be made to the SEBI in Form A by the sponsor. SEBI may. on receipt of all information. : 9015667204. the Board may reject the application and inform the applicant of the same. acting alone or in combination with another body corporate. treasury bills. and any other like instruments as specified by the RBI from time to time Real estate mutual fund scheme means a mutual fund scheme that invests directly or indirectly in real estate assets or other permissible assets Sponsor means any person who. 9999001336 E-MAIL. allcsclub@gmail. The Board may register the mutual fund and grant a certificate in Form B on the applicant paying the registration fee as specified in these regulations.com a mutual fund scheme that invests in securities in the same proportion as an index of securities Money market mutual fund means a scheme of a mutual fund which has been set up with the objective of investing exclusively in money market instruments like commercial papers. rbsifr754@gmail.com Page |8 . WEST PATEL NAGAR TEL NOS. (registration fee – 25 lakh) Where the sponsor does not satisfy the eligibility criteria. call or notice money. (application fee – 1 lakh) An application. Government securities having an unexpired maturity up to one year. decide the application.com. certificate of deposit. Payment of annual service fee TEACHING CENTRES : MEHRAULI. Every such application shall be accompanied by nonrefundable application fee as specified in these regulations. which is not complete in all respects shall be liable to be rejected The Board may require the sponsor to furnish such further information or clarification as may be required by it.ravishbhateja@gmail. usance bills.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). commercial bills.

com Page |9 .com A mutual fund shall pay before the 15th April each year a service fee as specified in these regulations for every financial year.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). rbsifr754@gmail. allcsclub@gmail. TEACHING CENTRES : MEHRAULI. : 9015667204.com. The Board may not permit a mutual fund who has not paid service fee to launch any scheme.ravishbhateja@gmail. WEST PATEL NAGAR TEL NOS. 9999001336 E-MAIL.

(d) the sponsor or any of its directors or the principal officer to be employed by the mutual fund should not have been guilty of fraud or has not been convicted of an offence involving moral turpitude or has not been found guilty of any economic offence For the purposes of this clause “sound track record” shall mean the sponsor should. Disqualification from being appointed as trustees No person shall be eligible to be appointed as a trustee unless— (a) (b) (c) (d) he is a person of ability. 9999001336 E-MAIL. the applicant has to fulfill the following: (a) the sponsor should have a sound track record and general reputation of fairness and integrity in all his business transactions.com. interest and tax in three out of the immediately preceding five years. TEACHING CENTRES : MEHRAULI. rbsifr754@gmail.— (i) (ii) (iii) (iv) be carrying on business in financial services for a period of not less than 5 years. (b) the applicant is a fit and proper person. duly registered under the provisions of the Indian Registration Act. WEST PATEL NAGAR TEL NOS. and the networth is positive in all the immediately preceding 5 years.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). CONSTITUTION AND MANAGEMENT OF MUTUAL FUND AND OPERATION OF TRUSTEES. including the fifth year. integrity and standing. and the sponsor has profits after providing for depreciation. allcsclub@gmail. executed by the sponsor in favour of the trustees named in such an instrument. (c) the sponsor has contributed or contributes at least 40% to the net worth of the AMC. 1908. and has not been found guilty of moral turpitude. and the networth in the immediately preceding year is more than the capital contribution of the sponsor in the AMC. and has not been convicted of any economic offence or violation of any securities laws.ravishbhateja@gmail. : 9015667204.com Eligibility criteria for registration of mutual funds For the purpose of grant of a certificate of registration. ETC Mutual fund shall be constituted in the form of a trust A mutual fund shall be constituted in the form of a trust and the instrument of trust shall be in the form of a deed.com P a g e | 10 . and has furnished particulars as specified in Form C.

com.com P a g e | 11 . - No person who is appointed as a trustee of a mutual fund shall be eligible to be appointed as a trustee of any other mutual fund At least 2/3rd of the trustees shall be independent persons and shall not be associated with the sponsors No trustee shall be appointed without prior approval of the SEBI. The trustees shall be accountable for. WEST PATEL NAGAR TEL NOS. officer or employee of an AMC shall be eligible to be appointed as a trustee of any mutual fund. unless - - - - TEACHING CENTRES : MEHRAULI. The trustees shall have a right to obtain from the AMC such information as is considered necessary by the trustees The trustees shall ensure before the launch of any scheme that the AMC has appointed o all key personnel including fund manager and o auditors to audit its accounts o appointed a compliance officer o appointed registrar The trustees shall ensure that o AMC has obtained. : 9015667204. the funds and property of the respective schemes and shall hold the same in trust for the benefit of the unit holders in accordance with these regulations and the provisions of trust deed. allcsclub@gmail. and be the custodian of.ravishbhateja@gmail. 9999001336 E-MAIL. wherever required under these regulations. rbsifr754@gmail. The trustees shall ensure that no change shall take place in the scheme of MF which would affects the interest of unitholders. Rights and obligations of the trustees The trustees and the AMC shall with the prior approval of the SEBI enter into an investment management agreement. prior in principle approval from the stock exchange(s) where units are proposed to be listed o the AMC has been managing the mutual fund schemes independently of other activities o AMC have taken adequate steps to ensure that the interest of investors of one scheme are not being compromised with those of any other scheme or of other activities of the AMC. o all the activities of the AMC are in accordance with the provisions of these regulations.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997).com Further No AMC and no director.

com P a g e | 12 . rbsifr754@gmail.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997).com (i) (ii) a written communication about the proposed change is sent to each unitholder the unitholders are given an option to exit at the prevailing Net Asset Value without any exit load TEACHING CENTRES : MEHRAULI. allcsclub@gmail. WEST PATEL NAGAR TEL NOS.ravishbhateja@gmail. : 9015667204. 9999001336 E-MAIL.com.

ensure that all service providers are holding appropriate registrations from the SEBI or concerned regulatory authority Specific due diligence The Trustees shall obtain internal audit reports at regular intervals from independent auditors appointed by the Trustees obtain compliance certificates at regular intervals from the AMC hold meeting of trustees more frequently consider the reports of the independent auditor and compliance reports of AMC at the meetings of trustees for appropriate action communicate in writing to the AMC of the deficiencies and checking on the rectification of deficiencies. the trustee.com. WEST PATEL NAGAR TEL NOS.com DUE DILIGENCE BY TRUSTEES General Due Diligence The Trustees shall be involve themselves in the appointment of the directors on the SEBI of the AMC. rbsifr754@gmail. allcsclub@gmail. held and administered by proper persons and by a proper number of such persons.com P a g e | 13 . the sponsor or any of its subsidiaries or the trustees) the Chairman of the AMC shall not be a trustee of any mutual fund networth of the AMC shall not be less than Rs. CONSTITUTION AND MANAGEMENT OF AMC AND CUSTODIAN Appointment of an AMC The sponsor or. shall appoint an AMC The appointment of an AMC can be terminated by majority of the trustees or by 75% of the unit holders of the scheme.ravishbhateja@gmail.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). or associated in any manner with. the BOD of AMC shall have at least 50% independent directors (who are not associate of. if so authorised by the trust deed. ensure that the trust property is properly protected. 10 crores TEACHING CENTRES : MEHRAULI. Any change in the appointment of the AMC shall be subject to prior approval of the SEBI and the unit holders. review the desirability or continuance of the AMC if substantial irregularities are observed in any of the schemes not allow the AMC to float new schemes. : 9015667204. 9999001336 E-MAIL.

provident funds. : 9015667204. purchase or sell securities.com P a g e | 14 . unless full disclosure of its intention to invest has been made in the offer documents. 9999001336 E-MAIL. Further an asset management company shall not be entitled to charge any fee on its investment in that scheme TEACHING CENTRES : MEHRAULI. not undertake any other business activities except activities in the nature of o management and advisory services provided to pooled assets including  offshore funds.com. which is average of 5 per cent or more of the aggregate purchases and sale of securities made by the mutual fund in all its schemes The asset management company shall not invest in any of its scheme. Restrictions on business activities of the AMC The AMC shall— not act as a trustee of any mutual fund.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). pension funds. venture capital funds. rbsifr754@gmail. insurance funds if any of such activities are not in conflict with the activities of the mutual fund and MF satisfies other conditions Further AMC may undertake portfolio management services and advisory services for other than broad based fund subject to compliance with the prescribed conditions:*Broad based fund shall mean the fund which has at least 20 investors and no single investor account for more than 25% of corpus of the fund.com no appointment of a director of an AMC shall be made without prior approval of the trustees. AMC and its obligations The AMC shall ensure that the investment of funds pertaining to any scheme is not contrary to the provisions of these regulations and the trust deed. allcsclub@gmail. WEST PATEL NAGAR TEL NOS.ravishbhateja@gmail. The AMC shall obtain required in-principle approval from the stock exchange(s) where units are proposed to be listed The AMC shall be responsible for the acts of commission or omission by its employees or other associated persons The fund managers shall ensure that the funds of the schemes are invested to achieve the objectives of the scheme and in the interest of the unit holders An AMC shall not through any broker associated with the sponsor.

com The asset management company shall not carry out its operations including trading desk. The mutual fund shall appoint a Custodian to carry out the custodial services for the schemes of the fund and sent intimation of the same to the SEBI within 15 days of the appointment of the Custodian In case of a gold exchange traded fund scheme.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). Restriction on appointment of custodian No custodian in which the sponsor or its associates hold 50% or more of the voting rights of the share capital of the custodian or where 50% or more of the directors of the custodian represent the interest of the sponsor or its associates shall act as custodian for a mutual fund constituted by the same sponsor or any of its associates or subsidiary company. the title deed of real estate assets held by it may be kept in the custody of a custodian registered with the SEBI. the assets of the scheme being gold or gold related instruments may be kept in custody of a bank which is registered as a custodian with the SEBI. : 9015667204. 9999001336 E-MAIL. allcsclub@gmail. WEST PATEL NAGAR TEL NOS. rbsifr754@gmail. TEACHING CENTRES : MEHRAULI.com. unit holder servicing and investment operations outside the territory of India Appointment of custodian In case of a real estate mutual fund scheme.com P a g e | 15 .ravishbhateja@gmail.

allcsclub@gmail. shall be listed on a stock exchange Repurchase of close ended schemes Units of a close ended scheme. where units are proposed to be listed. If SEBI do not suggest any modification in the offer document within 21 working days from the date of filing.com P a g e | 16 . Every form of application for units of a mutual fund shall be accompanied by the memorandum containing such information as may be specified by the SEBI. Conversion of close ended scheme into open ended scheme TEACHING CENTRES : MEHRAULI. Listing of close ended schemes Every close ended scheme. other than those of an equity linked savings scheme shall not be repurchased before the end of maturity period of such scheme. the AMC may issue the offer document. The SEBI may in the interest of investors require the AMC to carry out such modifications in the offer document as it deems fit. The advertisement for each scheme shall disclose investment objective of each scheme. The offer document shall contain the disclosure regarding the prior in principle approval obtained from the stock exchange(s). Disclosures in the offer document The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision. Advertisement material Advertisements in respect of every scheme shall be in conformity with the Advertisement Code as specified in these regulations and shall be submitted to the SEBI within 7 days from the date of issue.com. 9999001336 E-MAIL. : 9015667204.ravishbhateja@gmail. The offer document and advertisement materials shall not be misleading or contain any statement or opinion which are incorrect or false. rbsifr754@gmail.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997).com SCHEMES OF MUTUAL FUND Procedure for launching of schemes No scheme shall be launched by the AMC unless such scheme is approved by the trustees and a copy of the offer document has been filed with the SEBI. WEST PATEL NAGAR TEL NOS. other than an equity linked savings scheme.

all the applicants applying upto 5000 units shall be given full allotment subject to the oversubscription mentioned in clause (b). Refund the application money The mutual fund and AMC shall be liable to refund the application money to the applicants. period and other terms of the roll over and all other material details of the scheme are disclosed to the unit holders and a copy of the same has been filed with the SEBI Such roll over will be permitted only in the case of those unit holders who express their consent in writing and the unitholders who do not opt for the roll over or have not given written consent shall be allowed to redeem their holdings in full at net asset value based price.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). 9999001336 E-MAIL. : 9015667204. Allotment of units and refunds of moneys The AMC shall specify in the offer document.— (i) if the mutual fund fails to receive the minimum subscription amount (ii) if the moneys received from the applicants for units are in excess of subscription TEACHING CENTRES : MEHRAULI. and (b) in case of oversubscription the extent of subscription it may retain Where the AMC retains the oversubscription. WEST PATEL NAGAR TEL NOS.com P a g e | 17 . or (b) the unit holders are provided with an option to redeem their units in full. - Offering period No scheme of a mutual fund (other than the initial offering period of any equity linked savings schemes) shall be open for subscription for more than 15 days.— (a) if the offer document of such scheme discloses the option and the period of such conversion.— (a) the minimum subscription amount it seeks to raise under the scheme. and Redemption and roll over of close ended scheme A close ended scheme shall be fully redeemed at the end of the maturity period A close-ended scheme may be allowed to be rolled over if the purpose.ravishbhateja@gmail.com. allcsclub@gmail. rbsifr754@gmail.com The units of close ended scheme may be converted into open-ended scheme.

com. a statement of accounts specifying the number of units allotted to the applicant as soon as possible but not later than 5 working days from the date of closure of the initial subscription list and/or from the date of receipt of the request from the unit holders in any open ended scheme. shall be freely transferable by act of parties or by operation of law. WEST PATEL NAGAR TEL NOS. - Transfer of units A unit unless otherwise restricted or prohibited under the scheme. allcsclub@gmail. rbsifr754@gmail. : 9015667204. The AMC shall issue units in dematerialized form to a unit holder in a close ended scheme listed on a stock exchange within 2 working days of the receipt of request from the unit holder. on production of instrument of transfer together with relevant unit certificates. TEACHING CENTRES : MEHRAULI. who desires to trade in units shall hold units in dematerialised form. is made in the offer document. An applicant in a close ended scheme whose application has been accepted shall have the option either to receive the statement of accounts or to hold units in dematerialised form. 9999001336 E-MAIL. A unit holder. The asset management company shall.com Any amount refundable above shall be refunded within a period of 5 working days from the date of closure of subscription list otherwise the AMC shall be liable to pay interest to the applicants at a rate of 15% per annum from the expiry of said five working days from the date of closure of the subscription list. register the transfer and return the unit certificate to the transferee within 30 days from the date of such production : Guaranteed returns No guaranteed return shall be provided in a scheme. (b) unless a statement indicating the name of the person who will guarantee the return. in a close ended scheme listed on a stock exchange.com P a g e | 18 .SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). (c) the manner in which the guarantee is to be met has been stated in the offer document.— (a) unless such returns are fully guaranteed by the sponsor or the asset management company.ravishbhateja@gmail. Statement of accounts or unit certificates The AMC shall issue to the applicant whose application has been accepted.

rbsifr754@gmail. WEST PATEL NAGAR TEL NOS. allcsclub@gmail. subject to the following: (a) the units of the scheme are rated by a registered credit rating agency from the viewpoint of the ability of its portfolio structure to attain protection of the capital invested therein (b) the scheme is close ended TEACHING CENTRES : MEHRAULI.com Capital Protection oriented schemes A capital protection oriented scheme may be launched.ravishbhateja@gmail.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). : 9015667204. 9999001336 E-MAIL.com.com P a g e | 19 .

shall— (a) cease to carry on any business activities in respect of the scheme so wound up. shall be first utilised towards discharge of such all liabilities and then the balance shall be paid to the unit holders in proportion to their respective interest in the assets of the scheme as on the date when the decision for winding up was taken. (b) cease to create or cancel units in the scheme. (c) cease to issue or redeem units in the scheme. A scheme of a mutual fund may be wound up.com P a g e | 20 . or (b) if 75% of the unit holders of a scheme pass a resolution that the scheme be wound up. The proceeds of sale realised above.com. TEACHING CENTRES : MEHRAULI. requires the scheme to be wound up.ravishbhateja@gmail. 9999001336 E-MAIL. in the opinion of the trustees. the trustee or AMC as the case may be. The trustee or the person authorised to wind up shall dispose of the assets of the scheme concerned in the best interest of the unit holders of that scheme. allcsclub@gmail. after repaying the amount due to the unit holders (a) on the happening of any event which. rbsifr754@gmail. Procedure and manner of winding up The trustee shall call a meeting of the unit holders to approve by simple majority of the unit holders present and voting at the meeting resolution for authorising the trustees or any other person to take steps for winding up of the scheme Meeting of the unit holders shall not be necessary if the scheme is wound up at the end of maturity period of the scheme. WEST PATEL NAGAR TEL NOS.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). or (c) if the SEBI so directs in the interest of the unit holders Effect of winding up On and from the date of the publication of notice for winding up of scheme. : 9015667204.com WINDING UP A close-ended scheme shall be wound up on the expiry of duration fixed in the scheme on the redemption of the units unless it is rolled over for a further period.

Seventh Schedule shall apply to a gold exchange traded fund scheme. Moneys collected under any money market scheme of a mutual fund shall be invested only in money market instruments. as on the latest balance-sheet date. The mutual fund shall not borrow except to meet temporary liquidity needs of the mutual funds for the purpose of repurchase. securitised debt instruments. except to the extent necessary to meet the liquidity requirements for honouring repurchases or redemptions. The mutual fund having an aggregate of securities which are worth Rs. : 9015667204. restriction. 9999001336 E-MAIL. The mutual fund shall not advance any loans for any purpose. as disclosed in the offer document. rbsifr754@gmail. WEST PATEL NAGAR TEL NOS.com P a g e | 21 . which are either asset backed or mortgage backed securities.com.com INVESTMENT OBJECTIVES AND VALUATION POLICIES Investment objective A mutual fund may invest moneys collected under any of its schemes only in— (a) (b) (c) (d) (e) (f) securities.ravishbhateja@gmail. borrowing. gold or gold related instruments real estate assets All investments made shall be in accordance with the investment objective of the relevant mutual fund scheme. Moneys collected under any gold exchange traded fund scheme shall be invested only in gold or gold related instruments Investment. A gold exchange traded fund scheme shall be subject to the following investment restrictions o the funds of any such scheme shall be invested only in gold or gold related instruments in accordance with its investment objective. shall (subject to SEBI instructions) settle their transactions only through dematerialised securities. privately placed debentures. allcsclub@gmail. Even to meet temporary liquidity needs. Any investment to be made a mutual fund shall be invested subject to the investment restriction specified in the Seventh Schedule. mutual fund shall not borrow more than 20 % of the net asset of the scheme and the duration of such a borrowing shall not exceed a period of 6 months.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). etc. redemption of units or payment of interest or dividend to the unit holders. money market instruments. and TEACHING CENTRES : MEHRAULI. 10 crores or more.

com P a g e | 22 . WEST PATEL NAGAR TEL NOS.ravishbhateja@gmail. TEACHING CENTRES : MEHRAULI.com o the mutual fund may invest remaining funds in short-term deposits of scheduled commercial banks. : 9015667204.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). allcsclub@gmail.com. 9999001336 E-MAIL. rbsifr754@gmail.

ravishbhateja@gmail. other than that of equity linked savings scheme. shall be calculated on daily basis and published in at least two daily newspapers having circulation all over India.com. shall at least once a week publish in a daily newspaper of all India circulation. : 9015667204.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). rbsifr754@gmail. 9999001336 E-MAIL. While determining the prices of the units. The mutual fund. WEST PATEL NAGAR TEL NOS. the sale and repurchase price of units.com P a g e | 23 . Pricing of Units The price at which the units may be subscribed or sold and the price at which such units may at any time be repurchased by the mutual fund shall be made available to the investors. in case of open-ended scheme. allcsclub@gmail.com Computation of Net Asset Value Every mutual fund shall compute the Net Asset Value of each scheme by dividing the net assets of the scheme by the number of units outstanding on the valuation date. The Net Asset Value of the scheme shall be calculated and published at least in two daily newspapers at intervals of not exceeding one week the Net Asset Value of a close ended scheme. the mutual fund shall ensure that the repurchase price is not lower than 93 per cent of the Net Asset Value and the sale price is not higher than 107 per cent of the Net Asset Value the difference between the repurchase price and the sale price of the unit shall not exceed 7 per cent calculated on the sale price TEACHING CENTRES : MEHRAULI.

WEST PATEL NAGAR TEL NOS. (ii) on which construction is complete and which is usable. but does not includeI. unless the context otherwise requires(a) “real estate asset” means an identifiable immovable property(i) which is located within India in such city as may be specified by the SEBI or in a SEZ within the meaning of section 2(za) of the Special Economic Zones Act. (vi) which is not subject matter of any litigation. allcsclub@gmail. : 9015667204. (v) which is free from all encumbrances. or a property which is reserved or attached by any Government or other authority or pursuant to orders of a court of law or the acquisition of which is otherwise prohibited under any law for the time being in force. II.com P a g e | 24 . Usage of real estate assets of a real estate mutual fund scheme The asset management company may let out or lease out the real estate assets held by the real estate mutual fund scheme. or land specified for agricultural use. 9999001336 E-MAIL. Not more than 25% of the total rental income of the scheme shall be derived from assets so let out. 2005. III. a project under construction. All financial transactions of a real estate mutual fund scheme shall be routed through banking channels and they shall not be cash or unaccounted transactions.ravishbhateja@gmail. IV. V. (iv) which is legally transferable. (iii) which is evidenced by valid title documents. A real estate mutual fund scheme shall not undertake lending or housing finance activities.com. Conditions for real estate mutual fund schemes Every real estate mutual fund scheme shall be close-ended and its units shall be listed on a stock exchange The units issued by a real estate mutual fund scheme shall not confer any right on the unit holders to use the real estate assets held by the scheme The title deeds pertaining to real estate assets held by a real estate mutual fund scheme shall be kept in safe custody with the custodian of the mutual fund. TEACHING CENTRES : MEHRAULI. or vacant land.com REAL ESTATE MUTUAL FUND SCHEMES Definitions For the purposes of this Chapter.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). rbsifr754@gmail. or deserted property.

2. and (b) at fair price on every ninetieth day from the day of its purchase. WEST PATEL NAGAR TEL NOS. Not more than 15% of net assets in any single real estate project No mutual fund shall. invest more than 25% of the total issued capital of any unlisted company. Not more than 30% of net assets in a single city Unless otherwise disclosed in the offer document.ravishbhateja@gmail. No mutual fund shall. 2. under all its real estate mutual fund schemes.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). Investment limitations in securities of unlisted company 1. Valuation of real estates assets and declaration of net asset value The real estate assets held by a real estate mutual fund scheme shall be valued – (a) at cost price on the date of acquisition. rbsifr754@gmail. allcsclub@gmail. invest more than 15% of its net assets in the real estate assets of any single real estate project. No mutual fund shall invest more than 15% of the net assets of any of its real estate mutual fund schemes in the equity shares or debentures of any unlisted company. 9999001336 E-MAIL. The net asset value of every real estate mutual fund scheme shall be calculated and declared at the close of each business day on the basis of the most current valuation of the real estate assets held by the scheme and accrued income thereon.com Permissible investments General investment conditions At least 35% of the net assets of the scheme in real estate assets At least 75% of the net assets of the scheme real estate assets mortgage backed securities equity shares or debentures of companies engaged in dealing in real estate assets or in undertaking real estate development projects Other investment conditions 1.com. under all its real estate mutual fund schemes. TEACHING CENTRES : MEHRAULI. under all its real estate mutual fund schemes. : 9015667204. invest more than 30% of its net assets in a single city. no mutual fund shall. if any.com P a g e | 25 .

(2) Units of infrastructure debt fund schemes shall be listed on a recognized stock exchange. (3) An infrastructure debt fund scheme shall have minimum 5 investors and no single investor shall hold more than 50% of net assets of the scheme. (4) No infrastructure debt fund scheme shall accept any investment from any investor which is less than Rupees one crore.ravishbhateja@gmail. rbsifr754@gmail. Strategic Investor means (i) (ii) (iii) an Infrastructure Finance Company registered with RBI as NBFC a Scheduled Commercial Bank International Multilateral Financial Institution Conditions for infrastructure debt fund schemes (1) An infrastructure debt fund scheme shall be launched o either as close-ended scheme maturing after more than five years o or interval scheme with lock-in of five years and interval period not longer than one month.com P a g e | 26 . and o other permissible assets in accordance with these regulations or o bank loans in respect of completed and revenue generating projects of infrastructure companies or projects or special purpose vehicles.com INFRASTRUCTURE DEBT FUND SCHEMES Infrastructure debt fund scheme means a mutual fund scheme that invests primarily (minimum 90% of scheme assets) in the o debt securities or o securitized debt instrument of  infrastructure companies or  infrastructure capital companies or  infrastructure projects or  special purpose vehicles which are created for the purpose of facilitating or promoting investment in infrastructure. WEST PATEL NAGAR TEL NOS.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). provided that such units shall be listed only after being fully paid up. TEACHING CENTRES : MEHRAULI. : 9015667204. 9999001336 E-MAIL.com. allcsclub@gmail.

(6) Each scheme launched as infrastructure debt fund scheme shall have firm commitment from the strategic investors for contribution of an amount of at least Rupees 25 crores before the allotment of units of the scheme are marketed to other potential investors. : 9015667204. 9999001336 E-MAIL. infrastructure development projects. TEACHING CENTRES : MEHRAULI. which are rated below investment grade or unrated Such investment limit may be extended upto 50% of the net assets of the scheme with the prior approval of the board of trustees and the board of asset management company. and other permissible assets in accordance with these regulations or bank loans in respect of completed and revenue generating projects of infrastructure companies or projects or special purpose vehicles. o o The balance amount (10% or less) may be invested in equity shares. WEST PATEL NAGAR TEL NOS.com P a g e | 27 . No mutual fund shall. Permissible investments Every infrastructure debt fund scheme shall invest invests at least 90% of ninety percent of the net assets in the o o debt securities or securitized debt instrument of  infrastructure companies or  infrastructure capital companies or  infrastructure projects or  special purpose vehicles which are created for the purpose of facilitating or promoting investment in infrastructure. rbsifr754@gmail.ravishbhateja@gmail.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). under all its infrastructure debt fund schemes.com. invest more than 30% of its net assets in the debt securities or assets of any single infrastructure company or project or special purpose vehicles An infrastructure debt scheme shall not invest more than 30% of the net assets of the scheme in debt instruments or assets of any single infrastructure company or project or special purpose vehicles.com (5) The minimum size of the unit shall be Rupees ten lakhs. allcsclub@gmail. or money market instruments and bank deposits. convertibles financing instruments of companies engaged in infrastructure.

com.com TEACHING CENTRES : MEHRAULI. allcsclub@gmail.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997). rbsifr754@gmail.ravishbhateja@gmail. WEST PATEL NAGAR TEL NOS. 9999001336 E-MAIL.com P a g e | 28 . : 9015667204.

100 crores The total expenses of the scheme The total expenses of the scheme (excluding issue or redemption expenses) shall be subject to the following limits:— (a) fund of funds scheme. (B) and the weighted average of the total expense ratio of the underlying schemes shall not exceed 2. WEST PATEL NAGAR TEL NOS.com Limitation on fees and expenses on issue of schemes Investment and advisory fees The Asset Management Company may charge the mutual fund with investment and advisory fees which are fully disclosed in the offer document subject to the following namely:— Investment and advisory fees In case of index fund scheme fees shall not exceed 0.com.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997).com P a g e | 29 . or (ii) it may consist of (A) management fees for the scheme not exceeding 0. : 9015667204. (b) index fund scheme or exchange traded fund.25% of the weekly average net assets outstanding in each accounting year 1% of the excess amount over Rs.ravishbhateja@gmail. allcsclub@gmail.100 crores where net assets so calculated exceed Rs. (B) other expenses relating to administration of the scheme. the total expenses of the scheme including the management fees shall be either:(i) not exceeding 0. and (C) charges levied by the underlying schemes: Provided that the sum total of (A). TEACHING CENTRES : MEHRAULI. depending upon whether the NAV of the scheme is calculated on daily or weekly basis.75% of the weekly average net assets In case of other fund schemes if the net assets of scheme do not exceed Rs.100 crores 1.75% of the daily or weekly average net assets depending upon whether the NAV of the scheme is calculated on daily or weekly basis.50% of the daily or weekly average net assets (depending upon whether the NAV of the scheme is calculated on daily or weekly basis) of the scheme. rbsifr754@gmail.75% of the daily or weekly average net assets. 9999001336 E-MAIL.

4.300 crores of the daily or average weekly net assets 2. 9999001336 E-MAIL. 3. A mutual fund scheme shall not invest more than 10% of its NAV in unrated debt instruments issued by a single issuer and the total investment in such instruments shall not exceed 25% of the NAV of the scheme. rbsifr754@gmail. No mutual fund scheme shall make any investment in. No scheme of a mutual fund shall make any investment in any fund of funds scheme.com o the total expenses of the scheme including the investment and advisory fees shall not exceed 1.5% of the weekly average net assets. or (b) any security issued by way of private placement by an associate or group company of the sponsor. WEST PATEL NAGAR TEL NOS. (iv) on the balance of the assets 1. (ii) on the next Rs. (c) any other scheme(i) on the first Rs. TEACHING CENTRES : MEHRAULI. 5.25% of the daily or weekly average net assets outstanding in each financial year. o Such investment limit may be extended to 20% of the NAV of the scheme with the prior approval of the Board of Trustees and the Board of AMC 2. in excess of 25 % of the net assets 6.5%. o All such investments shall be made with the prior approval of the Board of Trustees and the Board of asset management company.com P a g e | 30 . or (c) the listed securities of group companies of the sponsor.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997).— (a) any unlisted security of an associate or group company of the sponsor.25%. No mutual fund under all its schemes should own more than 10% of any company’s paid up capital carrying voting rights. treasury bills and collateralized borrowing and lending obligations. : 9015667204.0%.300 crores of the daily or average weekly net assets 2.ravishbhateja@gmail.100 crores of the daily or average weekly net assets 2. A mutual fund scheme shall not invest more than 15% of its NAV in debt instruments issued by a single issuer which are rated not below investment grade. allcsclub@gmail. No mutual fund scheme shall invest more than 30% of its net assets in money market instruments of an issuer o Such limit shall not be applicable for investments in Government securities.75%: Provided that in respect of a scheme investing in bonds such recurring expenses shall be lesser by at least 0. (iii) on the next Rs.com. RESTRICTIONS ON INVESTMENTS 1.

TEACHING CENTRES : MEHRAULI. A mutual fund scheme shall not invest more than 5% of its NAV in the unlisted equity shares or equity related instruments in case of open ended scheme and 10% of its NAV in case of close ended scheme. allcsclub@gmail. 9999001336 E-MAIL. rbsifr754@gmail.ravishbhateja@gmail. WEST PATEL NAGAR TEL NOS.com. No mutual fund scheme (index fund or sector or industry specific scheme) shall invest more than 10% of its NAV in the equity shares or equity related instruments of any company 8. : 9015667204.com 7.SARASWATI INSTITUTE OF FRONT RUNNERS SECURITIES LAWS – MUTUAL FUNDS By CS Anurag Jain (8800200997).com P a g e | 31 .