Role of Sebi
Role of Sebi
Role of Sebi
investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor. No one can issue any application form for units of mutual fund until the memorandum containing such information is issued. With each application form fund house has to provide such a memorandum providing guidelines to investors. Each close-ended scheme should be listed on a recognized stock exchange within six months from the closure of the subscription. A closed-ended scheme should be fully redeemed at the end of the maturity period. Unless a majority of the unit holders otherwise decide for its rollover by passing a resolution. The mutual fund and asset Management Company should be liable to refund the application money to the applicants. The asset management company should issue to the applicant whose application has been accepted, unit certificates or a statement of accounts specifying the number of units allotted to the applicant as soon as possible within six weeks 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 schemes. Total investment in such instruments should not exceed 25% of the NAV of the scheme. All such investments should be made with prior approval of the Board of Trustee and the Board of Asset Management Company. No mutual fund should own more than 10% of any companys paid up capital carrying voting rights under all its schemes.
Transfers of investments from one scheme to another (switchover) in the same mutual fund should be allowed ifa) Such transfer is done at the prevailing market price for quoted instruments on spot basis. b) The securities so transferred should be in conformity with his investment objective of the scheme to which such transfer is being done. I.Transfer of investment may be done in another scheme of the same asset management company or any other without charging any fees. II.The initial issue expenses in respect of any scheme may not exceed six per cent of the funds raised under the scheme. III.Each mutual fund should get the securities purchased or transferred in the name of the mutual fund on account of the concerned scheme, wherever investments are intended to be of long-term nature. IV.Each mutual fund can diversify its portfolio of each scheme as per market condition and this should be published by that fund in the monthly fact sheets issued to investors. V.No mutual fund scheme should make any investment in; 1) Any unlisted security of an associate or group company of the sponsor, or 2) Any security issued by way of private placement by associate or group company of the sponsor, or 3) The listed securities of group companies of the sponsor, which are in excess of 30% of the net asset of all the schemes of a mutual fund.
No mutual fund scheme should invest more than 10% of its NAV in the equity shares or equity related instruments of any company. This limit of 10% is not applicable to index fund and sector specific scheme A mutual fund scheme cannot invest more than 5% of its NAV in the equity shares or equity related investments in case of open-ended scheme and 10% in case of close-ended scheme.
capital loss to investor in case of a nearly exit, because the investment is subject to market risk. This is normally less in Mutual fund as the investment is made in basket of funds and hence your investment gets diversified.
MEASURES
To undertake nationwide investor awareness program so as to promote proper understanding of the concept and working of mutual funds. To disseminate information on Mutual Fund Industry and to undertake studies and research directly and/or in association with other bodies.