S.O.No.856(E) In exercise of the powers conferred by section 30 read with clause (c) of sub-section (2) of section 11 of the Securities and Exchange Board of India, Act 1992, (15 of 1992) the Securities and Exchange Board of India hereby makes the following regulations.
 
 

CHAPTER I

PRELIMINARY
 
 
 

Short title, application and commencement

1.(1) These regulations may be called the Securities and Exchange Board of India (Collective Investment Scheme) Regulations, 1998.     (2) They shall come into force on the date of their publication in the Official Gazette.

Definitions

2. In these regulations, unless the context otherwise requires:-     (a) "Act" means the Securities and Exchange Board of India Act 1992, (15 of 1992); (b) "advertisement" includes notices, brochures, pamphlets, circulars, showcards, catalogues, hoardings, placards, posters, insertions in newspaper, pictures, films, cover pages of offer documents or any other print medium, radio/ television programmes or through any electronic medium;  (c) "associate" includes a person - (i) who directly or indirectly, by himself, or in combination with relatives, exercises control over the Collective Investment Management Company or the trustee as the case may be, or (ii) in respect of whom the Collective Investment Management Company or the trustee, directly or indirectly, by itself, or in combination with other persons exercises a control or (iii) whose director, officer or employee is a director, officer or employee of the Collective Investment Management Company; (d)"collective investment management company" means a company formed and registered under the Companies Act, 1956 (1 of 1956) and registered by the Board under Regulation 11; (e) "appraising agency" means an agency empanelled with the Board for the purpose of conducting technical and/or financial appraisal of the project of a scheme. (f) "broker" means a stock broker as defined in Securities & Exchange Board of India (Stock Broker) Rules, 1992;  (g) "Board" means the Securities and Exchange Board of India established under the provisions of Section 4 of the SEBI Act; (h) "control" or "controlling interest" means, - (a) in case of a company any person or combination of persons who directly or indirectly own, control or hold shares carrying not less than 10% of the voting rights of such company; or (b) as between two companies, if the same person or combination of persons directly or indirectly, own control or hold shares carrying not less than 10% of the voting rights of each of the two companies; or (c) majority of the directors of any company who are in a position to exercise control over the Collective Investment Management Company. (i) "certificate" means a certificate of registration granted by the Board under Regulation 11; (j) "collective investment scheme" means any scheme or arrangement:- with respect to property of any description, the purpose of which is to enable the investors to participate in the arrangements by way of contributions and to receive profits or income or produce arising from the management of such property or investments made thereof; the contributions of the investors, by whatever name they are called, are pooled, and are utilised solely for the purposes of the scheme or the arrangement; the property or such contributions is managed as a whole on behalf of the investors, whether or not such properties or contributions and the investments made thereof are evidenced by identifiable properties or otherwise; or the investors do not have day to day control over the management/operation of the property/scheme. The following arrangements are not collective investment schemes:- Acceptance of deposits by companies under Section 58A of the Companies Act, 1956 and Non Banking Financial Companies (NBFCs) as defined under Section 45-I of the RBI Act, 1934; Acceptance of fund by Chit Funds in terms of Chit Funds Act, 1982; Acceptance of fund by Nidhi companies from its members as per direction of the Central Government issued under Section 637A of the Companies Act; Contracts of insurance under the Insurance Act, 1938; Any scheme of the employer for the benefit of its employees under the Provident Fund Scheme as per Employees’ Provident Fund and Miscellaneous Provision Act, 1952; Arrangements of building societies or co-operative societies under Co-operative Societies Act, 1912 including Co-operative Societies under State legislation; Any other schemes as may be declared as such by Securities and Exchange Board of India including Mutual Funds registered under the SEBI (Mutual Funds) Regulations, 1996. (k) "credit rating agency" means a person authorised to carry on the business of credit rating agency under Section 12 of the SEBI Act; (l) "depository" means a body corporate as defined in the Depositories Act, 1996 (22 of 1996);  (m) "economic offence" means an offence to which the Economic Offences (Limitation of Prosecution) Act, 1974 (12 of 1974) applies for the time-being; (n) "enquiry officer" means any person appointed as such by the Board under Chapter VII; (o) "form" means any of the forms specified as such in the First Schedule; (p) "fraud", for the purpose of these regulations has the same meaning as is assigned to it in section 17 of the Indian Contract Act, 1872 (9 of 1872);  (q) "inspecting officer" means any person appointed as such by the Board under Chapter VI; (r) "issue" means any issue of units by a collective investment scheme through an offer document; (s) "offer document" means any document by which a collective investment scheme invites public for subscription to units of a scheme; (t) "relative" means a person as defined in section 6 of the Companies Act, 1956 (1 of 1956); (u) "registrars to an issue and share transfer agent" means a body corporate registered as Registrars to an Issue and Share Transfer Agents under SEBI (Registrar to an Issue and Share Transfer Agents) Regulations, 1993 (v) "scheme" means a scheme of a collective investment scheme launched under Chapter IV; (w) "schedule" means any of the schedules annexed to these regulations; (x) "securities laws" means the Securities & Exchange Board of India Act, 1992 (15 of 1992), the Securities Contracts (Regulation) Act, 1956 (42 of 1956) and the Depositories Act, 1996 (22 of 1996) including their amendments and such other laws as may be enacted from time to time; (y) "trustee" means a person who has been granted a certificate of registration to carry on the business of Trusteeship under the Securities and Exchange Board of India ( Debenture Trustee) Regulations,1993 and who holds the property of the collective investment scheme in trust for the benefit of the unit holders; (z) "unit" means a unit issued under a scheme; (aa) "unit holder" means a person holding unit in a scheme of a collective investment scheme. (ab) "scheme property" means  contributions of moneys or money’s worth to the scheme; money that forms part of the scheme property; property acquired, directly or indirectly, with, or with the proceeds of , contributions or money referred to in paragraph (i) or (ii); income and property derived, directly or indirectly, from contributions, money or property referred to in paragraph (i),(ii) or (iii).  (3) Words and expressions used and not defined in this Regulation but defined in the Act, shall have the same meanings respectively assigned to them in the Act.     (4) No person shall issue to the public, offer to the public for subscription or purchase, or invite the public to subscribe for or purchase any units of a collective investment scheme unless he conforms to the requirements as specified in these regulations.     (5) If a person operates a collective investment scheme in violation/ contravention of Regulation (4), the following may apply to the Court to have the scheme wound up: the Board the person operating the scheme a member of the scheme.

 

REGISTRATION OF COLLECTIVE INVESTMENT MANAGEMENT COMPANY OF A COLLECTIVE INVESTMENT SCHEME
 
 
 

Application by an Collective Investment Management Company              Application fee to accompany the application              Application to conform to the requirements                     Furnishing information	6. The application for registration of the Collective Investment Management Company of a collective investment scheme shall be made in Form A.     7. Every application for registration under Regulation 6 shall be accompanied by non-refundable application fee as specified in the Second Schedule.     8. An application, which is not complete in all respects shall be liable to be rejected. Provided that, before rejecting any such application, the applicant shall be given an opportunity to complete such formalities within such time as may be specified by the Board.     9. The Board may require the Collective Investment Management Company such further information or clarification as may be required by it.
Eligibility criteria for registration of Collective Investment Management Company                                                                                                                                                                                             Grant of Certificate of registration                             Terms and conditions to be complied with                                                                                                                                                 Procedure where registration is not Granted                 Restrictions on business activities of the Collective Investment Management Company	10. For grant of registration of the Collective Investment Management Company of a collective investment scheme the applicant has to fulfil the following: -      (a) in case the Collective Investment Management Company is an existing Collective Investment Management Company it has a sound track record, general reputation and fairness in transactions; Explanation: For the purpose of this clause sound track record shall mean the networth and the profitability of the Collective Investment Management Company. the directors of the Collective Investment Management Company are persons having adequate professional experience in related field and not found guilty of moral turpitude or convicted of any economic offence or violation of any securities laws; the key personnel of the Collective Investment Management Company have not been found guilty of moral turpitude or convicted of any economic offence or violation of any securities laws; (d) the board of directors of such Collective Investment Management Company has atleast fifty percent directors who are either directly or indirectly not associated with the persons who have control over the Collective Investment Management Company; (e) at least one of the directors, on the board of the Collective Investment Management Company, who is not subject to retirement, is a representative of the Trustee; (f) the Collective Investment Management Company is not a trustee of any collective investment scheme; (g) the Collective Investment Management Company has a networth of not less than rupees ten crores: Explanation: For the purposes of this clause, "networth" means the aggregate of value of the paid up Equity share capital and free reserves ( excluding reserves created out of revaluation) reduced by the aggregate value of accumulated losses and deferred expenditure not written off including miscellaneous expenses not written off.      11. The Board may, after considering an application with reference to the matters specified in regulation 10, register the Collective Investment Management Company of a collective investment scheme and grant a certificate in Form B on the applicant paying the registration fee as specified in Second Schedule.     12. The approval granted under regulation 11 shall be subject to the following conditions, namely :- (a) any director of the Collective Investment Management Company shall not hold the office of the director in another Collective Investment Management Company unless such person is an independent director referred to in clause (d) of regulation 10 and approval of the board of Collective Investment Management Company of which such person is a director, has been obtained; the Collective Investment Management Company shall forthwith inform the Board of any material change in the information or particulars previously furnished, which have a bearing on the approval granted by it; (c)no appointment of a director of a Collective Investment Management Company shall be made without prior approval of the Trustee; (d)the Collective Investment Management Company undertakes to comply with these regulations; (e)any change in the controlling interest of the Collective Investment Management Company shall be made only after obtaining prior approval of the Trustee, the Board and seeking approval from the unit holders holding at-least one-half of the nominal value of the unit capital of the collective investment scheme. (f)The Collective Investment Management Company shall furnish such information and documents to the Trustee as and when required by the Trustee. (g)The Collective Investment Management Company shall make payment of fees as specified in the regulations and the Second Schedule. (h)The applicant is a fit and proper person.     13. Where an application made under regulation 6 for grant of registration does not satisfy the eligibility criteria laid down in regulation 10, the Board may reject the application and inform the applicant of the same.     14. The Collective Investment Management Company shall (1) not act as a trustee of any collective investment scheme; (2) only undertake the activity of managing collective investment scheme; (3) the Collective Investment Management Company shall not invest in any of its schemes unless full disclosure of its intention to invest has been made in the offer documents. Provided that a Collective Investment Management Company shall not be entitled to charge any fees on its investment in that scheme.
Collective Investment Management Company and its obligations	15.(1) The Collective Investment Management Company shall 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 these regulations, offer document and the trust deed. (2) The Collective Investment Management Company shall exercise due diligence and care in all its investment decisions as would be exercised by other persons engaged in the same business. (3) The Collective Investment Management Company shall be responsible for the acts of commissions or omissions by its employees or the persons whose services have been procured by the Collective Investment Management Company.  (4) The Collective Investment Management Company shall submit to the Trustee quarterly reports (i.e by end of March, June, September and December) of each year on its activities and the compliance with these regulations. (5) Notwithstanding anything contained in any contract or agreement or termination, the Collective Investment Management Company or its directors or other officers shall not be absolved of liability to the scheme for their acts of commission or omissions, while holding such position or office.  (6) An Collective Investment Management Company shall not utilise the services of its associates, employees or their relatives, for the purpose of any transaction relating to the scheme or distribution and sale of the proceeds of the scheme: Provided that an Collective Investment Management Company may utilise such services if disclosure to that effect is made to the unit holders and the brokerage or commission paid is also disclosed in the half yearly annual accounts of the collective investment scheme.  (7) In case the Collective Investment Management Company enters into any transactions relating to the scheme with any of its associates a report to that effect shall immediately be sent to the Trustee. (8) The Collective Investment Management Company shall file with the Trustee and the Board - (a) detailed bio-data of all its directors alongwith their interest in other companies within fifteen days of their appointment; and (b) any change in the interests of directors every six months. (9) The Collective Investment Management Company shall not appoint any person as key personnel who has been found guilty of any economic offence or involved in violation of securities laws. (10) The Collective Investment Management Company shall appoint registrar and share transfer agents who are registered with the Board. (11) The Collective Investment Management Company shall abide by the Code of Conduct as specified in the Fifth Schedule. (12) The Collective Investment Management Company shall give valid and effectual receipts for all monies coming into its hand on behalf of the Collective investment scheme and a monthly report of moneys received and spent on schemes of collective investment scheme shall be immediately sent to the Trustee. (13) The Collective Investment Management Company shall follow the rules and conduct of meetings of unit holders as specified in the Eighth Schedule. (14) A meeting of the Board of Directors of an Collective Investment Management Company to discuss the affairs of collective investment scheme shall be held atleast twice in every three months and atleast eight such meetings shall be held in every year. (15) The Collective Investment Management Company shall cause a copy of the Balance Sheet, Profit and Loss Account and other accounts to be furnished to each of the unit holders within two calendar months from the balance date of the collective investment scheme. Along with the copy of the Balance Sheet and Profit & Loss account a copy of the summary of the yearly appraisal report shall also be furnished to each of the unit holders. (16)The Collective Investment Management Company shall redress complaints of within 30 days from the receipt of the complaints. (17)The Collective Investment Management Company shall ensure that its officers/employees do not make improper use of their position to gain, directly or indirectly, an advantage for themselves or for any other person or to cause detriment to the members of the scheme. (18) The Collective Investment Management Company shall obtain third party public liability insurance against all usual risks in respect of any thing that might be undertaken by them on behalf of the scheme in performing the duties specified under the trust deed.
Removal of Collective Investment Management Company	16.(1) The Collective Investment Management Company of a collective investment scheme may be removed- if the Collective Investment Management Company ceases to carry on business or is in the course of being wound up, or if unit holders holding at least three-fourths of the nominal value of the unit capital of the collective investment scheme pass a resolution for removing the Collective Investment Management Company and the prior approval of the Board has been obtained, or if in the interest of the unit holders the Board or the Trustee, after obtaining prior approval of the Board, and after giving a personal hearing, decide to remove the Collective Investment Management Company. (2) On removal of the Collective Investment Management Company under sub-regulation 1 of regulation 16, a Collective Investment Management Company, registered with the Board, under regulation 11, shall be appointed by the Trustee. The appointment of the Collective Investment Management Company shall be completed within three months from the date of the removal of the Collective Investment Management Company, so removed. In the intervening period till a Collective Investment Management Company is appointed the Trustee shall act as Collective Investment Management Company. If, none of the Collective Investment Management Company, registered under regulation 11, consent to be appointed as Collective Investment Management Company of the Collective Investment Scheme, within a further period of three months, then the Trustee shall apply to the Court for an order directing it to wind up the scheme. An investment management agreement shall be executed in favour of the Collective Investment Management Company so appointed and from the date of its appointment shall be subject to all the duties and obligations as specified in the Regulations. The Collective Investment Management Company so removed shall from such date be released from complying with the obligations under the investment management agreement but remains liable for any antecedent breach thereof.
	(3) If a Collective Investment Management Company is appointed in terms of sub-regulation  2 of regulation 16, then a document: (a) to which the Collective Investment Management Company so removed is a party, in which a reference is made to it, or under which it has acquired or incurred a right, obligation or liability, or might have acquired or incurred a right, obligation or liability if it had remained the  Collective Investment Management Company; and (b) that is capable of having effect after the change; has effect as if the Collective Investment Management Company so appointed were a party to it, were referred to in it or had or might have acquired or incurred the right, obligation or liability under it.

 

CHAPTER III

CHAPTER IV

  SCHEMES OF COLLECTIVE INVESTMENT SCHEME
 
 
 

Procedure for launching of schemes                         Filing Fees                 Rating                 Appraisal                  Scheme duration not less than three years             Insurance     Disclosures in the offer document                                                                 Advertisement material                                 Misleading statements                                                                          Inter-Scheme Transfers	23.(1) No scheme shall be launched by the Collective Investment Management Company of a collective investment scheme unless such scheme is approved by the Trustee and a copy of the offer document has been filed with the Board.     (2) Every Collective Investment Management Company shall along with the offer document of each scheme pay filing fees as specified in the Second Schedule.     (3) No scheme shall be launched by the Collective Investment Management Company without obtaining rating from an approved Credit Rating Agency.     (4) No scheme shall be launched by the Collective Investment Management Company without getting the scheme appraised by an empanelled appraising agency.      (5) Collective Investment Management Company shall launch close ended schemes only and the duration of the schemes shall not be of less than three calendar years.     (6) The scheme needs to obtain insurance for protection of scheme assets.  24.(1) The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision and more specifically shall be in conformity with the contents of the Standard Offer document as specified in the Sixth Schedule. (2) The Board may in the interest of investors require the Collective Investment Management Company to carry out such modifications in the offer document as it deems fit.  (3) In case no modifications are suggested by the Board in the offer document within 21 days from the date of filing, the Collective Investment Management Company may issue the offer document.     25. (1) Advertisements in respect of every scheme shall be in conformity with the Advertisement Code as specified in the Seventh Schedule. (2) The advertisement for each scheme shall disclose in addition the investment objectives, the method and periodicity of valuation of property/ assets.     26.(1) The offer document and advertisement materials shall not be misleading or contain any statement or opinion which are incorrect or false. Where an offer document or advertisement includes any statement or opinion which are incorrect or false or misleading, every person - (i)who is a director of the Collective Investment Management Company at the time of the issue of the offer document; (ii)who has authorised himself to be named and is named in the offer document viz auditors, appraising agency; and  (iii)who has issued the advertisement shall be punishable under the SEBI Act, 1992 unless he proves either that the statement/opinion was immaterial or that he had reasonable ground to believe and did up to the time of the issue of the offer document or advertisement that the statement was true.      27. No inter-scheme transfers/ investments shall be permitted except at the time of termination of the scheme.
Offering Period         Allotment of Units and refunds of moneys                                                                                         Unit certificates	28. No scheme shall be open for subscription for more than 180 days.     29.(1) The Collective Investment Management Company shall specify in the offer document, - (a) the minimum and the maximum subscription amount it seeks to raise under the scheme; and  (b) in case of oversubscription the process of allotment of the amount oversubscribed. (2) The Collective Investment Management Company shall be liable to refund the application money to the applicants,-  (i) if the scheme fails to receive the minimum subscription amount referred to in clause (a) of sub-regulation (1). (3) Any amount refundable under sub-regulation (2) shall be refunded within a period of six weeks from the date of closure of subscription list, by Registered A.D and by cheque or demand draft marked "A/C. Payee" to the applicants.      (4) In the event of failure to refund the amounts within the period specified in sub-regulation (3), the Collective Investment Management Company shall be liable to pay interest to the applicants at a rate of fifteen percent per annum on the expiry of six weeks from the date of closure of the subscription list.      30. The Collective Investment Management Company shall issue to the applicant whose application has been accepted, unit certificates as soon as possible but not later than six weeks from the date of closure of the subscription list.
Transfer of units                                                         No Guaranteed returns                     Winding up	31.(1) An unit certificate unless otherwise restricted or prohibited under the scheme, shall be freely transferable by act of parties or by operation of law. (2) The Collective Investment Management Company shall, on production of instrument of transfer together with relevant unit certificates, register the transfer and return the unit certificate to the transferee within thirty days from the date of such production. Provided that if the units are with the depository such units will be transferable in accordance with the provisions of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996.     32. No guaranteed return shall be provided in a scheme. Indicative return, if assessed by the appraising agency, may be indicated in the offer document and has to be expressed in monetary terms rather than in kind.     33. (1) A scheme shall be wound up on the expiry of duration fixed in the scheme which should coincide with the accomplishment of the purpose of the scheme leading to the redemption of the units. (2) A scheme of a collective investment scheme may be wound up, after repaying the amount due to the unit holders,-  (a) on the happening of any event which, in the opinion of the Trustee, requires the scheme to be wound up and the prior approval of the Board is obtained; or (b) if unit holders of a scheme holding atleast three-fourth of the nominal value of the unit capital of the scheme pass a resolution that the scheme be wound up and the prior approval of the trustee is obtained; or (c) if the Board so directs in the interest of the unit-holders. (d) if the collective investment management company after due approval of the Trustee feels that the purpose of the scheme cannot be accomplished and a notice in writing explaining why the purpose of the scheme cannot be accomplished is sent to all the unit holders. (3) Where a scheme is to be wound up under sub-regulation (1) or sub-regulation (2), the Trustee shall give notice disclosing the circumstances leading to the winding up of the scheme:- (a) in two daily newspapers having circulation all over India, a vernacular newspaper circulating at the place where the Collective Investment Management Company is registered. (4)(a)The trustee shall dispose of the assets of the scheme concerned in the best interest of the unit holders of that scheme. (b) The proceeds of sale realised under clause (a), shall be first utilised towards discharge of such liabilities as are due and payable under the scheme and after making appropriate provision for meeting the expenses connected with such winding up, 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. (5) On the completion of the winding up, the trustee shall forward to the Board and the unit holders a report on the winding up containing particulars such as circumstances leading to the winding up, the steps taken for disposal of assets of the scheme before winding up, expenses of the scheme for winding up, net assets available for distribution to the unit holders and a certificate from the auditors of the collective investment scheme. (6) If, on completion of the winding up of a scheme, the Trustee who has been winding up the scheme has in its possession or under its control any unclaimed or undistributed money, the Trustee must, as soon as practicable, transfer the money to a special account opened in any scheduled bank, to be called "Unpaid Winding up of ...... Scheme", and a claim to any money so transferred can always be preferred by the person to whom the money is due. (7) Notwithstanding anything contained in this regulation, the provisions of these regulations in respect of disclosures of half yearly reports and annual reports shall continue to be applicable.
Effect of winding up	34. On and from the date of the publication of notice under clause (a) of sub-regulation (3) of regulation 33, the trustee or the Collective Investment Management Company as the case may be, shall- (a) cease to carry on any business activities in respect of the scheme so wound up;
Winding up of the scheme	35. After the receipt of the report under sub-regulation (5) of Regulation 33, if the Board is satisfied that all measures for winding up of the scheme have been complied with, the scheme shall cease to exist.
Appraising agency	36. Appraising agency whose appraisal report forms part of the offer document has to give a written consent for the issue of the offer document and shall be punishable under the SEBI Act, 1992 for any statement which is misleading, incorrect or false.
Money received through issue of units through offer document	37.(1) All moneys received through issue of units through offer document shall be kept in a separate bank account in the name of the scheme for which the issue has been made and shall be utilised for- adjustment against allotment of units only after the Trustee have received a statement from the registrars to the issue regarding minimum subscription amount, as stated in the offer document, having been received from the public, or  for refund of money either in the case where minimum subscription amount, as stated in the offer document, has not been received or in case of subscription over the maximum subscription amount, as stated in the offer document.  (2) The minimum subscription amount as specified in the offer document shall not be less than the minimum amount, as specified by the appraising agency, needed for completion of the project for which the scheme is being launched.  (3) The moneys credited to the account of the scheme shall be utilised for the purposes of the scheme and as specified in the offer document. (4) Moneys lying idle in the scheme account shall be invested in the manner as disclosed in the offer document.
Listing of schemes	38.(1) The units of every scheme shall be listed on a recognised stock exchange immediately after the allotment of units has been made to the successful applicants.

CHAPTER V

  GENERAL OBLIGATIONS
 

To maintain proper books of accounts and records, etc.	39.(1) Every Collective Investment Management Company shall keep and maintain proper books of accounts, records and documents, for each scheme of a collective investment scheme so as to explain its transactions and to disclose at any point of time the financial position of each scheme and in particular give a true and fair view of the state of affairs of the collective investment scheme and intimate to the Board the place where such books of accounts, records and documents including computer records are maintained. Every Collective Investment Management Company shall maintain and preserve, for a period of five years, after the close of a scheme, its books of accounts, records and documents.
Financial year     Despatch of warrants and proceeds             Annual Report	40. The financial year for all the schemes shall end as of March 31 of each year. 41.The Collective Investment Management Company shall, (a) despatch to the unit holders the dividend warrants within 42 days of the declaration of the dividend.     42. An annual report and annual statement of accounts of each scheme and the collective investment scheme shall be prepared in respect of each financial year.
Auditor's Report	43.(1) Every collective investment scheme shall have the annual statement of accounts audited by an auditor chosen from the list of auditors approved by the Board who is not in any way associated with the auditor of the Collective Investment Management Company.  Explanation: For the purposes of this sub-regulation and regulation 57 "auditor" means a person who is qualified to audit the accounts of a company under section 224 of the Companies Act, 1956 (1 of 1956). (2) The auditor shall be appointed by the Trustee.
	(3) The auditor shall forward his report to the Trustee and such report shall form part of the Annual Report of the collective investment scheme.  (4) The auditor's report shall comprise of the following:- (a) a certificate to the effect that:- (i) he has obtained all information and explanations which, to the best of his knowledge and belief, were necessary for the purpose of the audit; (ii) the balance sheet and the revenue account give a fair and true view of the scheme, state of affairs and surplus or deficit in the collective investment scheme for the accounting period to which the Balance Sheet or, as the case may be the Revenue Account relates; (iii) the statement of account has been prepared in accordance with accounting policies and standards as specified in the regulations.
Publication of Annual Report and summary thereof	44.(1) The scheme wise Annual Report of a collective investment scheme or an abridged summary thereof shall be published through an advertisement as soon as may be but not later than two calendar months from the balance date of the collective investment scheme. (2) The Annual Report and abridged summary thereof shall contain details as specified in the regulations and such other details as are necessary for the purpose of providing a true and fair view of the operations of the collective investment scheme.  (3)The report if published in summary form shall carry a note that full Annual Report shall be available for inspection at the Head Office of the Collective Investment Management Company.
Annual Report to be forwarded to the Board	45. Every Collective Investment Management Company shall within two months from the date of closure of each financial year forward to the Board a copy of the Annual Report and other information so that the entire scheme wise assets of the collective investment scheme is disclosed to the Board.
Periodic and continual disclosures	46.(1) The Collective Investment Management Company and the trustee, shall make such disclosures or submit such documents as they may be called upon to do so by the Board. (2) Without prejudice to the generality of sub-regulation (1), the Collective Investment Management Company on behalf of the collective investment scheme shall furnish the following periodic reports to the Board namely :- (a) copies of the duly audited annual statements of accounts including the balance sheet and the profit and loss account in respect of each scheme and for the collective investment scheme, once a year; (b) a copy of quarterly unaudited accounts; (c) a quarterly statement of movements in net assets for each of the schemes;  (3) No sale of units of any scheme shall be made by the Collective Investment Management Company unless accompanied by documents which contain information which is adequate for the investors to take an informed decision.
Quarterly disclosures	47. A Collective Investment Management Company on behalf of collective investment scheme shall before the expiry of one month from the close of each quarter that is 31st March, 30th June, 30th September and 31st December publish its unaudited financial results in one English daily newspaper circulating in the whole of India and in a newspaper published in the language of the region where the Head Office of the Collective Investment Management Company is situated. Provided that the quarterly unaudited report referred in this sub-regulation shall contain details as specified in the regulations and such other details as are necessary for the purpose of providing a true and fair view of the operations of the collective investment scheme.
Disclosures to the investors	48. The Collective Investment Management Company and Trustee shall be bound to make such disclosures to the unit holders as are essential in order to keep them informed about any information which may have an adverse bearing on their investments.
Rules relating to calling of meeting of unit holders, transfer and transmission of units	The calling of meeting of unit holders as well as transfer and transmission of units of collective investment scheme shall be follow the rules laid down in the Eighth Schedule.
Appointment and functions of auditors of collective investment scheme	50.(1) A person shall not be eligible to act as auditor of a collective investment scheme if the person is:  an associate of the collective investment management company; or the auditor of the collective investment management company’s financial statements.  (2) The auditor of the collective investment scheme must, as soon as possible, notify the Board and the Trustee in writing if the auditor has reasonable grounds to suspect that a contravention of the regulations has occurred. (3) The auditor of the collective investment scheme: has a right of access at all reasonable times to the books of the scheme; and may require an officer/employee of the collective investment management company to give the auditor information and explanations for the purposes of the audit.
Removal/ Resignation of auditors	51.(1) The collective investment management company may, after prior approval of the Trustee, remove the auditor of the collective investment scheme. Provided that an auditor for the collective investment scheme is appointed immediately from the list of auditors approved by the Board. (2) The auditor of the collective investment scheme may resign by giving a three months written notice to the collective investment management company and to the Trustee.

 

 

Board's right to inspect and investigate	52.(1) The Board may appoint one or more persons as inspecting officer to undertake the inspection of the books of accounts, records, documents and infrastructure, systems and procedures or to investigate the affairs of the Trustee and Collective Investment Management Company of a collective investment scheme for any of the following purposes, namely: (a) to ensure that the books of accounts are being maintained by the Trustee and Collective Investment Management Company in the manner specified in these regulations; (b) to ascertain whether the provisions of the Act and these regulations are being complied with by the Trustee and Collective Investment Management Company; (c) to ascertain whether the systems, procedures and safeguards followed by the Trustee and Collective Investment Management Company are adequate; (d) to ascertain whether the provisions of the Act or any rules or regulations made thereunder have been violated;  (e) to investigate into the complaints received from the investors or any other person on any matter having a bearing on the activities of the Trustee and Collective Investment Management Company; (f) to suo-motu ensure that the affairs of the Trustee or Collective Investment Management Company are being conducted in a manner which are in the interest of the investors or the securities market.
Notice before inspection and investigation	53. (1) Before ordering an inspection or investigation under regulation 52 the Board shall give not less than ten days notice to the Collective Investment Management Company or Trustee as the case may be. (2) Notwithstanding anything contained in sub-regulation (1), where the Board is satisfied that in the interest of the investors no such notice should be given, it may, by an order in writing direct that such inspection or investigation be taken up without such notice. (3)During the course of inspection or investigation, Trustee or Collective Investment Management Company against whom the inspection or investigation is being carried out shall be bound to discharge his obligations as provided in regulation 54.
Obligations on inspection and investigation	54. (1) It shall be the duty of the Trustee or Collective Investment Management Company whose affairs are being inspected or investigated, and of every director, officer and employee thereof, to produce to the inspecting officer such books, accounts, records, and other documents in its custody or control and furnish him such statements and information relating to the activities as Trustee or Collective Investment Management Company of a collective investment scheme, as the inspecting officer may require, within such reasonable period as the inspecting officer may specify. (2) The Trustee or Collective Investment Management Company scheme shall allow the inspecting officer to have a reasonable access to the premises occupied by it or by any other person on its behalf and also extend reasonable facility for examining any books, records, documents, and computer data in the possession of the Trustee and Collective Investment Management Company or such other person and also provide copies of documents or other materials which in the opinion of the inspecting officer are relevant for the purpose of the inspection.  (3) The inspecting officer, in the course of inspection or investigation, shall be entitled to examine or record the statements of any director, officer, or employee of the Trustee and Collective Investment Management Company. (4) It shall be the duty of every director, officer, or employee of the Collective Investment Management Company or trustee to give to the inspecting officer all assistance in connection with the inspection or investigation, which the inspecting officer may reasonably require.
Submission of report to the Board	55. The inspecting officer shall, as soon as possible, on completion of the inspection or investigation submit a report to the Board:  Provided that if directed to do so by the Board, he may submit interim reports.
Communications of findings, etc.	56.(1) The Board shall, after consideration of the inspection report or investigation report referred to in regulation 55, communicate the findings of the inspecting officer to the Trustee or Collective Investment Management Company as the case may be, and give him an opportunity of being heard: Provided that if any proceedings under Chapter VI are initiated the procedure under Chapter VI shall be followed.  (2) On receipt of the reply if any, from the Trustee or Collective Investment Management Company, as the case may be, the Board may call upon the Trustee or Collective Investment Management Company to take such measures as the Board may deem fit in the interest of the investors, securities market and for due compliance with the provisions of these regulations.
Appointment of Auditor	57. (1) Without prejudice to the provisions of regulation 43, the Board shall have the power to appoint an auditor to inspect or investigate, as the case may be, into the books of accounts or the affairs of the trustee or Collective Investment Management Company of a collective investment scheme: Provided that the Auditor so appointed shall have the same powers of the inspecting officer as stated in Regulation 52 and the obligation of the Collective Investment Management Company or trustee and their respective employees in regulation 54, shall be applicable to the investigation under this regulation.
Payment of inspection fees to the Board	58. The Board shall be entitled to recover such expenses including fees paid to the auditors as may be incurred by it for the purposes of inspecting the books of accounts, records and documents of the Trustee and the Collective Investment Management Company.

 

CHAPTER VII

PROCEDURE FOR ACTION IN CASE OF DEFAULT
 

Suspension of certificate	59. The Board may suspend a certificate granted to an Collective Investment Management Company of a collective investment scheme if such Collective Investment Management Company :- (a) contravenes any of the provisions of the Act and these regulations;  (b) fails to furnish any information or furnishes wrong information relating to its activity as an Collective Investment Management Company of a collective investment scheme as required under these regulations; (c) fails to submit periodical returns as required under these regulations; (d) does not co-operate in any inquiry or inspection conducted by the Board; (e) fails to comply with any directions of the Board issued under the provisions of the Act or the regulations; (f) fails to resolve the complaints of the investors or fails to give a satisfactory reply to the Board in this behalf; (g) is guilty of misconduct or improper or unbusinesslike or unprofessional conduct which is not in accordance with the Code of Conduct specified in the Fifth Schedule; (h) fails to maintain the networth in accordance with the provisions of regulation 10; (i) fails to pay any fees; (j) violates the conditions of registration; (k) the Collective Investment Management Company does not carry out its obligations as specified in these regulations.
Cancellation of certificate	60. The Board may cancel the certificate of registration granted to an Collective Investment Management Company, if such Collective Investment Management Company - (a) is guilty of fraud, or has been convicted of an economic offence;  (b) has been guilty of repeated defaults of the nature specified in regulation 59; (c) its financial position and that of the collective investment scheme deteriorates to such an extent that the Board is of the opinion that its continuance is not in the interest of unit holders .
Manner of making order of cancellation or suspension	61. No order of suspension or cancellation of certificate shall be made by the Board against the Collective Investment Management Company of a collective investment scheme except after holding an enquiry in accordance with the procedure specified in regulation 62.
Manner of holding enquiry before suspension or cancellation	62.(1) For the purpose of holding an enquiry, under regulation 61 the Board may appoint one or more enquiry officers.  (2) The enquiry officer shall issue to the Collective Investment Management Company of a collective investment scheme, at its registered office or the principal place of its business, a notice setting out the grounds on which action is proposed to be taken against it and calling upon it to show cause against such action within a period of fourteen days from the date of receipt of the notice. (3) The Collective Investment Management Company shall within fourteen days of the date of receipt of such notice, furnish to the enquiry officer a written reply, together with copies of documentary or other evidence relied on by it or sought by the Board from the Collective Investment Management Company. (4) The enquiry officer shall give a reasonable opportunity of hearing to the Collective Investment Management Company to enable it to make submissions in support of its reply made under sub-regulation (3). (5) Before the enquiry officer, the Collective Investment Management Company may either appear in person or through any person duly authorised by the Collective Investment Management Company. Provided that no lawyer or advocate shall be permitted to represent the Collective Investment Management Company at the enquiry: Provided further that where a lawyer or an advocate has been appointed by the Board as a presenting officer under sub-regulation (6), it shall be lawful for the Collective Investment Management Company to present its case through a lawyer or advocate. (6) The enquiry officer may if he considers it necessary, ask the Board to appoint a presenting officer to present its case. The enquiry officer shall, after taking into account all relevant facts and submissions made by the Collective Investment Management Company submit a report to the Board and recommend the action, if any, to be taken against the Trustee or Collective Investment Management Company as also the grounds on which the penal action is justified.
Show cause notice and order	63.(1) On receipt of the report from the enquiry officer, the Board shall consider the same and issue to the Collective Investment Management Company a show-cause notice. (2) The Collective Investment Management Company shall within fourteen days of the date of the receipt of the show-cause notice, send a reply to the Board. (3) The Board, after considering the reply of the asset management company, if any, shall as soon as possible pass such order as it deems fit.
	(4) The Board shall send to the Collective Investment Management Company a copy of the order made under sub-regulation (3).
Effect of suspension or cancellation of certificate of registration	64. (1) On and from the date of the suspension of the certificate, the Collective Investment Management Company shall cease to carry on any activity as Collective Investment Management Company of the collective investment scheme, during the period of suspension, and shall be subject to the directions of the Board with regard to any records, documents, or assets that may be in its custody or control, relating to its activities as Collective Investment Management Company of the collective investment scheme. (2) On and from the date of cancellation of the certificate, the Collective Investment Management Company shall with immediate effect, cease to carry on any activity as Collective Investment Management Company of the collective investment scheme, as the case may be. (3) The Board may in the interest of the unit holders issue directions with regard to the transfer of any records, documents or assets that may be in its custody or control, relating to its activities as Collective Investment Management Company of the collective investment company. (4) The Board may in order to protect the interest of the unit holders order the transfer of records, document, assets, etc. to any other trustee or Collective Investment Management Company. Provided that the Board shall while appointing such a person determine the terms and conditions of such an appointment.  (5) On appointment of the new entity the collective investment scheme shall not dissolve and from the date of the appointment the new entity shall be entitled to exercise all duties and obligations of the Collective Investment Management Company as prescribed in these regulations.
Publication of order of suspension or cancellation	65. The order of suspension or cancellation passed under sub-regulation (3) of regulation 63, may be published by the Board in two newspapers.
Action against intermediaries	66. The Board may initiate action for suspension or cancellation of registration of an intermediary holding a certificate of registration under section 12 of the Act who fails to exercise due diligence or to comply with the obligations under these regulations: Provided that no such certificate of registration shall be suspended or cancelled unless the procedure specified in the regulations applicable to such intermediary is complied with.
Adjudication, etc.	67. The Board may for the offences specified in sections 15 A to 15 E of the Act initiate action under section 15 I of the Act and in case of violation of any of the provisions of the Act or the regulations, initiate action under sections 11, 11B or section 24 of the Act. (2) The Board may in addition to suspension or cancellation of certificate, order suspension of launching of any scheme of a collective investment scheme by an Collective Investment Management Company for a period not exceeding one year for violation of any of the provisions of these regulations after following procedure under this Chapter. (3) The Board may during the pendency of any proceeding of suspension or cancellation under this Chapter also order suspension for launching of any scheme of a collective investment scheme by an Collective Investment Management Company not exceeding three months without following procedure under this Chapter.     Provided that no order shall be passed without giving an opportunity of hearing.

 
 
 

CHAPTER VIII

REGISTRATION OF EXISTING COLLECTIVE INVESTMENT SCHEMES
 

Application by existing collective investment schemes	68.(1) A Collective investment scheme in existence on the commencement of the SEBI (Collective Investment Scheme) Regulations, 1998 shall make an application for registration to the Board before the expiry of six months from the date of notification of these Regulations.  (2) Existing collective investment schemes can continue to operate their schemes until a certificate of registration is granted to it or rejection of application for registration is communicated to it.  (3) Existing collective investment scheme can launch any new schemes or can mobilise money from the public or from the investors under the existing schemes only as per these Regulations.
Conditions for continuation of the existing collective investment schemes	69.(1) The existing collective investment schemes can continue to operate only after satisfying the following: an application for registration under Chapter II of these Regulations has been made.  a compliance committee is constituted such that atleast sixty percent of the persons on the committee are either directly or indirectly not associated with the persons who have control over the existing Collective Investment Management Company. (c) the Networth requirement as specified in Chapter II is met. Provided that the said networth requirement should be met within a period of three years from the date of notification of the Regulations. (d) trustees are appointed as specified in Chapter III of the Regulations. Provided that the said requirement shall be met within a period of three years from the date of notification of the Regulations. (e)appraisal of the existing schemes is done by an empanelled appraising agency. (f) rating of the existing schemes is done by an approved credit rating agency.  (g) accounting and valuation norms are satisfied. Provided that the said requirement shall be met within a period of three years from the date of notification of the Regulations.  (h) general obligations as specified in Chapter V of the Regulations are adhered to. (i) that the existing collective investment schemes shall be subject to inspection, audit as specified in the Regulations. (j) that the scheme is or shall be in a position to pay its present or future liabilities in full as and when those claims accrue; (k) that the affairs of the scheme are not being or are not likely to be conducted in a manner detrimental to the interests of its investors; (l) that the general character of the management or the proposed management of the scheme shall not be prejudicial to the public interest or the interests of its investors; (m) any other condition, fulfilment of which in the opinion of the Board, shall be necessary to ensure that the commencement of or carrying on of the business of a collective investment scheme shall not be prejudicial to the public interest or in the interest of the investors;
Winding up or refund of money in case an existing collective investment scheme fails to satisfy the conditions for continuance	70. The existing collective investment scheme, which fails to comply with the conditions as specified in Regulation 69 shall wind up the scheme after repaying the amount due to the unit holders in the manner as specified under Regulation 33, 34 and 35.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 

Power of the Board to issue clarifications

71. In order to remove any difficulties in the application or interpretation of these regulations, the Board shall have the power to issue clarifications and guidelines in the form of notes or circulars which shall be binding on the Trustee or Collective Investment Management Company of a collective investment company.

 
 
 
 
 
 
 

F.NO. SEBI/ / /98
 
 
 
 

D.R.MEHTA

CHAIRMAN

SECURITIES AND EXCHANGE BOARD OF INDIA
 
 
 
 
 
 

FIRST SCHEDULE - FORMS
 
 

FORM A
 
 

SECURITIES AND EXCHANGE BOARD OF INDIA
 
 

(COLLECTIVE INVESTMENT SCHEME ) REGULATIONS, 1998

(Regulation 6, 8)
 
 

APPLICATION FOR THE GRANT OF REGISTRATION AS COLLECTIVE INVESTMENT MANAGEMENT COMPANY OF A COLLECTIVE INVESTMENT SCHEME
 
 
 
 

1. NAME OF APPLICANT:

 

 
 
 
 

2. CONTACT PERSON:

 

 
 
 
 

3. NAME OF THE COMPLIANCE OFFICER:

TELEPHONE NO. : FAX NO.:
 
 
 
 

4. ADDRESS OF APPLICANT:

PIN CODE:
 
 
 
 

TELEPHONE NO. : FAX NO.:
 
 
 
 
 
 

5. ADDRESS OF APPLICANT FOR

PIN CODE:
 
 
 
 

TELEPHONE NO. : FAX NO.:

6. ADDRESS OF BRANCH OFFICES (IN INDIA & ABROAD) OF THE APPLICANT, IF ANY:

(A)
 
 

(B)
 
 

(C)
 
 
 
 

7. WHETHER ANY OTHER APPLICATION UNDER SECURITIES AND EXCHANGE BOARD OF INDIA ACT, 1992 HAS BEEN MADE FOR GRANT OF CERTIFICATE, IF SO, DETAILS THEREOF:

 

 
 
 
 
 
 

8. DATE AND PLACE OF INCORPORATION OF THE COLLECTIVE INVESTMENT MANAGEMENT COMPANY:


( Enclose a copy of certificate of incorporation)
 
 
 
 
 
 

9. OBJECTS OF THE COLLECTIVE INVESTMENT MANAGEMENT COMPANY:

MAIN OBJECTS:
 
 
 
 
 
 

ANCILLARY OBJECTS:

(the Memorandum and Articles of Association would need the approval

of SEBI and necessary amendments shall have to be incorporated

in the existing Memorandum and Articles of Association)
 
 
 
 

10. CAPITAL STRUCTURE AND SHAREHOLDING PATTERN:


(give list of major share holders holding 5% or more voting rights

and percentage of their share holdings, as of the latest date)
 
 
 
 

11. NET WORTH OF THE COMPANY:


(as of the latest date)
 
 
 
 

12. PRESENT LINE(S) OF BUSINESS ACTIVITIES:


(History, major achievements and present activity)

13. FINANCIAL INFORMATION:

for the immediately preceding 3 years)
 
 
 
 

14. ACCOUNTING POLICIES:

15. NAMES AND ACTIVITIES OF ASSOCIATE COMPANIES/CONCERNS CARRYING ON ACTIVITIES RELATED TO THE SECURITIES MARKET AND GRANTED REGISTRATION BY SEBI:

16. MANAGEMENT OF THE COLLECTIVE INVESTMENT MANAGEMENT COMPANY:

17. DETAILS OF INFRASTUCTURAL FACILITIES:

18. OTHER INFORMATION:

19. Names and addresses of the auditors of the applicant:

 

 

20. Submit a copy each of:

1. Draft Trust Deed; and
2. Draft Investment Management Agreement

INSTRUCTION FOR FILLING UP FORM :-
 
 

1. Applicants must submit a completed application form together with appropriate supporting documents to the Board.

 

 

2. It is important that this application form should be filled in accordance with the regulations.

 

 

3. An application which is not complete is liable to be rejected.

 

 

4. Answers must be typed and legible.

 

 

5. Information which needs to be supplied in more details may be given on separate sheets which should be attached to the application form.

 

 

6. The application must be signed by the competent person having authority to do so and all signatures must be in original.

1. In exercise of the powers conferred by Section 30 of the Securities and Exchange Board of India Act, 1992, (15 of 1992) read with the Securities and Exchange Board of India (Collective Investment Scheme) Regulations, 1998 made thereunder the Board hereby grants a certificate of registration to ___________________________________________________________ as an Collective Investment Management Company of the Collective Investment Scheme.

 

 
 
 
 
 
 

2. Registration Code for the Collective Investment Management Company of the Collective Investment Scheme is AMC/CIS/ / /

Date

By order

Sd/-

For and on behalf

Securities and Exchange Board of India
 
 

FORM C
 
 

SECURITIES AND EXCHANGE BOARD OF INDIA
 
 

(COLLECTIVE INVESTMENT SCHEME) REGULATIONS, 1998

[Regulation 19]
 
 

TRUSTEEHIP OF THE COLLECTIVE INVESTMENT SCHEME
 
 
 
 

SECOND SCHEDULE
 
 

SECURITIES AND EXCHANGE BOARD OF INDIA
 
 

(COLLECTIVE INVESTMENT SCHEME) REGULATIONS, 1998
 
 

[Regulations 7, 11, 23(2)]
 
 

FEES
 
 

I. A. APPLICATION FEES PAYABLE

SECURITIES AND EXCHANGE BOARD OF INDIA
 
 

(COLLECTIVE INVESTMENT SCHEME ) REGULATIONS, 1998
 
 

[Regulation 18(1)]
 
 
 
 

CONTENTS OF THE TRUST DEED
 
 
 
 

The Trust Deed shall contain the following clauses namely :-
 
 
 
 

15. Trusteeship fee, if any, payable to Trustee shall be provided in the Trust Deed.

17. The removal of the trustee in all cases would require the prior approval of the Board.

18. The Trust Deed shall lay down the procedure for seeking approval of the unit holders under such circumstances as are specified in the Regulations.
 
 

19. The Trust Deed shall lay down the provisions for redressal of grievances of the unit holders.

 

 

20. The Trust Deed shall lay down procedure for appointment of new Trustee and their removal.

 

 

21. The Trust Deed shall lay down the circumstances under which the assets may be disposed off with the approval of the Trustee.

 

 

22. The Trust Deed shall lay down that the Collective Investment Management Company and the trustee shall not invest the corpus of a collective investment scheme in other collective investment scheme.

 

 

23. The Trust Deed shall lay down the provisions regarding transfer of units, meeting of unit holders and maintenance of upto date register of unit holders.

 

 

24. The Trust Deed shall lay down the time within which the unit certificates would be issued after allotment and the time within which transfer of units would be completed. The time frame for redressal of investor complaints shall also be specified.

 

 

25. The Trust Deed shall lay down that the Collective Investment Management Company shall not without the approval of the trustee publish or cause to be published any advertisement containing any invitation to buy units, or any statement with respect to the sale price of the units or the return expected from the scheme.

 

 

26. The Trust Deed shall lay down that it will use its best endeavours to carry on and conduct its business in a proper and efficient manner and to ensure that the scheme to which the deed relates is carried on and conducted in a proper and efficient manner.

 

 

27. The Trust Deed shall lay down that the Collective Investment Management Company will-

1. make available to the trustee or to the auditors for inspection all the books of the collective investment scheme.
2. give to the trustee or to the auditors such oral or written information as the trustee or the auditor requires with respect to all matter relating to the scheme or otherwise relating to the affairs of the scheme.

29. The Trust Deed shall lay down that the Collective Investment Management Company will not exercise the right to vote in respect of any units relating to the scheme held by the Collective Investment Management Company.

 

 

30. The Trust Deed shall lay down that any document required to be lodged with the Board shall be signed by atleast two Directors of the Collective Investment Management Company with atleast one of them being an independent director.
31. FOURTH SCHEDULE

[Regulation 21(2)]
 
 

CONTENTS OF THE INVESTMENT MANAGEMENT AGREEMENT
 
 
 
 

SECURITIES AND EXCHANGE BOARD OF INDIA
 
 

(COLLECTIVE INVESTMENT SCHEME) REGULATIONS, 1998
 
 

[Regulations 21(20), 15(11), 59(g)]
 
 

CODE OF CONDUCT
 
 

4. Trustee and Collective Investment Management Company must ensure scheme wise segregation of funds and assets created.

 

 

5. Trustee and Collective Investment Management Company shall carry out the business and invest in accordance with the investment objectives stated in the offer documents and take investment decision solely in the interest of unit holders.

 

 

6. Trustee and Collective Investment Management Company must not use any unethical means to sell; market or induce any investor to buy their schemes.

SECURITIES AND EXCHANGE BOARD OF INDIA
 
 

(COLLECTIVE INVESTMENT SCHEME ) REGULATIONS, 1998
 
 

[Regulation 24(1)]
 
 

CONTENTS OF THE OFFER DOCUMENT
 
 
 
 

The offer document filed with the Board shall contain in addition to the requirements specified in the Regulations, information so as to enable the unit holders to make a true, fair and informed decision on the investments in the scheme.
 
 

1. The name of the scheme, name of the collective investment scheme, name of the Collective Investment Management Company and trustee and address of the registered office of the Collective Investment Management Company and trustee along with their telephone number and fax number.

 

 

2. The nature, number, price and amount of the units offered.

 

 

3. The following general risk should be incorporated:

1. The name and address of the Registrar to the issue along with the telephone number and fax number.

 

 

2. The name and address of the auditor of the scheme.

 

 

3. Opening, Closing and Earliest closing date (if any) for the offer.

 

 

4. Credit Rating.

 

 

5. Name of the Compliance Officer.

 

 

6. Name of the appraising agency.

 

 

7. The front cover page shall be white. No patterns or pictures shall be printed on this page.

 

 

8. The cover page paper shall be of adequate thickness (preferably minimum 100 gcm quality).

1.2. Front Inside Cover Page
 
 

Index shall appear on the Front Inside Cover Page.
 
 

1.3. Inner cover Pages
 
 

1. the offer document forwarded to SEBI is in conformity with the documents, materials and paper relevant to the issue;

 

 

2. all the legal requirements connected with the said issue, as also the guidelines, instructions, etc. issued by SEBI, the Government and any other competent authority in this behalf have been duly complied with; and

 

 

3. the disclosures made in the offer document are true, fair and adequate to enable the investors to make a well informed decision as to the investment in the proposed scheme.

1. that the complaints received in respect of the issue of units of the scheme would be attended to expeditiously and satisfactorily.

 

 

2. that the funds required for despatch of refund orders/allotment letters/ certificates by registered post shall be made available to the Registrar to the Issue by the Collective Investment Management Company.
3. that the certificates of the units/refund orders to the non-resident Indians shall be despatched in time.
4. that no units shall be issued to the public later than six months after the date of the offer document ie. the date when the offer document is filed with the Board.

5. Fictitious Applications
 
 

Any person who
 
 

1. makes in a fictitious name an application for acquiring or subscribing for any units of a scheme, or

 

 

2. otherwise induces the scheme to allot, or register any transfer of units therein to him, or to any other person in a fictitious name, shall be punishable under the provisions of the SEBI Act, 1992.

6. Minimum Subscription Clause
 
 

8.2. Rights of the unit holders
 
 

8.3. How to apply - availability of forms, offer document and mode of payment
 
 

8.4. Any special tax benefits for collective investment scheme and its unit holders.
 
 
 
 
 
 

9. Appraisal of the Project
 
 

1. to detail particulars as are sufficient to disclose the true nature of the scheme.
2. the nature and description of property and the conditions or circumstances under which it is will become vested with the Trustee.
3. with respect to the property purchased or acquired or proposed to be purchased or acquired in relation to the scheme, the following shall be given

1. the name and address of the vendor (s)
2. the amount of cash or other consideration paid or payable to the vendor or each vendor, as the case may be
3. short particulars of any transaction relating to the property, in which any vendor of the property or any person who is, or was at the time of the transaction, having control or controlling interest in or director of the Collective Investment Management Company or directly or indirectly related to the Collective investment management company.

1. the amount or estimated amount of -

1. the expense of setting up the scheme; and
2. the expense of the issue,