Mutual Fund is established as a trust and are governed by the Indian Trusts Act, 1882. It raises money through sale of fund units to the public. These units are sold under one or more schemes that invests in equity, debt, gold, real estate and other financial assets.
Sponsors - The mutual fund trust is created by one or more Sponsors, who invests capital in the mutual fund business.
Beneficiary - Every trust has beneficiaries. The beneficiaries, in the case of a mutual fund trust are the investors who invest in various schemes of the mutual fund.
Trust Deed -The operations of the mutual fund trust are governed by a Trust Deed, which is executed between the sponsors and the trustees. SEBI has laid down various clauses that need to be part of the Trust Deed.
Trustee - The trustees have a critical role in ensuring that the mutual fund complies with all the regulations and protects the interests of the unit-holders.
Asset Management Company
The AMC is appointed by the sponsor or the Trustees. Day to day management of the schemes is handled by an Asset Management Company.
The trustees execute an investment management agreement with the AMC, setting out its responsibilities.
The AMC needs to have a minimum net worth of Rs.50 crore and at least 50 percent of the directors should be independent directors.
The AMC is responsible for conducting the activities of the mutual fund. It therefore arranges for the requisite offices and infrastructure, engages employees, provides for the requisite software, handles advertising and sales promotion, and interacts with regulators and various service providers.
The AMC has to take all reasonable steps and exercise due diligence to ensure that the investment of funds pertaining to any scheme is not contrary to the provisions of the SEBI regulations and the trust deed.
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20 авг 2024
