Mutual Funds Company Registration
Overview of Mutual Funds Company
A mutual fund company is set up like trust with promoters/sponsors, Asset Management Company (AMC), Trustees, and Custodians. The no. of promoters could be more than one. The trustee of the company can hold its property for the benefit of the unitholders.
The AMC (must be approved by SEBI) is responsible for managing the funds by making investments in different types of securities. The custodian is also registered with SEBI, is responsible for holding securities of various schemes related to the funds in his/her custody. The trustees of these companies have been vested with the general power to supervise and direct the AMC. They are also responsible for the monitoring of performance and compliance as per SEBI norms.
Types of Mutual Funds:
The type of investments is as per the investment objectives disclosed in the offer documents. An applicant willing to register as a Mutual fund company in India has to submit Form A under Schedule I of SEBI regulations with a non-refundable fee of Rs. 5 lakhs.
Eligibility Norms for Mutual Funds Company Registration:
For companies willing to get the certificate of registration, eligibility conditions set by SEBI must be met. The conditions are as per SEBI (Mutual Fund) regulation of 1996.
Documents Required For Registering As Mutual Funds Company
Here is a quick checklist of documents required to register as a mutual fund company:
Procedure for Registering as Mutual Funds Company
Follow this step-by-step procedure to register your Mutual fund company in India.
- An applicant shall apply Form A as per Schedule I SEBI (Mutual Fund) Regulations, 1996 with a non-refundable fee of INR 5 Lakh.
- A person who holds 40% or more net worth of AMC is deemed to be a sponsor & he is required to file an application.
- While a sponsor company applies for registration, it has to make sure that its MOA has a clause of object permitting to continue activities of the mutual fund.
- A complete list of the associated companies or group companies that are registered with SEBI in any form shall be attached to an application.
- Details of the promoter company or its associate company if listed on any stock exchange shall also be mentioned.
- Declaration stating that director or any administrative officer connected with the sponsor company has not been found guilty of fraud or has not convicted any offence involving moral turpitude.
- If the sponsor company is registered with RBI as a Banking Company or an NBFC, the details of the same shall also be annexed.
- Trust deed shall be executed along with set up of the board of trustees comprising 2/3rd of independent directors.
- Incorporate the Asset Management Company & the Trustee Company. Submit completed MoA & AoA of these companies.
- After Incorporation of these two companies, submit the auditor’s certificate certified by Chartered Accountant who certifies:
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The AMC that works under the mutual fund company is responsible for managing the funds of investors by making investments in different types of securities.
Mutual funds are of three types:
Close Ended: Fixed maturity plans and capital protection.
Open-Ended: Money market/liquid, Equity/growth funds. Index scheme, sectorial scheme, Tax saving schemes, balanced funds.
Interval Mutual funds: Allows investors trading of units at a pre-defined interval.
An applicant shall apply Form A as per SEBI Schedule I (Mutual Fund) Regulations, 1996 with a non-refundable fee of INR 5 Lakh.