ORGANISATION AND MANAGEMENT OF MUTUAL

FUNDS

PRESENTED BY,
FAIROOZ ALI
S4 MBA
122026
INTRODUCTION

A mutual fund is a financial intermediary in capital market that pools collective investments in form of
units from retail and corporate investors and maintain a portfolio of various schemes which invest that
collective investments in equity and debt instruments on behalf of these investors. Mutual fund is expert
entity which helps an investor invest in equity and debt instruments indirectly rather than taking risk of
investing money directly in these instruments.
ORGANISATION OF MUTUAL FUND

Mutual funds have a unique structure not shared with other entities such as companies or
firms. It is important for employees & agents to be aware of the special nature of this
structure, because it determines the rights & responsibilities.
SEBI (Securities and Exchange Board of India) is the regulatory body that manages all
mutual funds in India. It has mandated a three-tiered structure for any fund house in India.
These tiers are as follows –
 Sponsor
 Trustee
 Asset Management Company (AMC)
SPONSOR

A fund sponsor or the guarantor is anyone who starts a mutual fund. This could be an individual or an individual
partnered with another entity (associate company). The primary roles of a fund sponsor include –
 setting up a mutual fund
 approaching the SEBI for permissions
 promoting the associate company handling the fund
 recruit people to ensure the fund house functions.
REQUIREMENTS

 The sponsor must have at least five years of hands-on experience in the financial services and products business,
with a net positive Total Worth.
 The sponsor’s net worth in the previous year should be more than the wealth contributed to setting up the fund
house.
 The sponsor should be able to put in at least 40% of their net worth while setting up the fund house.
 The sponsor should have good returns in the past three to five years before setting up the fund house
TRUSTEES

 A trustee from the board of trustees could be a member of the board of directors, a bank, or a company approved by the
Securities and Exchange Board of India.
 The primary functions of the trustees include:
 Ensuring the fund house undertakings are compliant with SEBI guidelines
 Ensuring proper selection of other fund members (AMC, CEO, fund managers, CIO, registrar, etc.) based on their skills
 Validating schemes published by the fund house
 Ensuring company worth is as per rules
 Reporting to the Securities and Exchange Board of India two times a year
 Ensuring fund house is following compliances
 Appointing distributors and brokers
ASSET MANAGEMENT COMPANIES (AMCS)

The Asset Management Company (AMC) or the Fund Management Firm is also the functioning investment manager
of the trust. But before that, it needs to get registered with the Government of India.
 The roles of AMCs:
 Launch and initiate mutual fund schemes
 Generate funds with trustees and founders and monitor their development.
 Manage funds and solicit associate services with bankers, brokers, lawyers, registrars, etc.,
CONCLUSION

A mutual fund is a financial intermediary in capital market that pools collective investments in form of units from
retail and corporate investors and maintain a portfolio of various schemes which invest that collective investments in
equity and debt instruments on behalf of investors.
Three key players namely the sponsor, the AMC and the mutual fund trust are involved in setting up a mutual fund
business in India. They are supported by banks, registrars, transfer agents, depository participants and custodians to
perform mutual funds activities smoothly.
Thank you