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    Mutual Fund Registration

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    Paras Mittal
    1) A mutual fund must register with SEBI by submitting an application along with fees of INR 5 lakh. 2) SEBI will examine the application and grant registration once the sponsor meets eligibility criteria such as having a sound track record, fulfilling governance requirements, and contributing 40% of the AMC's net worth. 3) Upon satisfying all conditions, SEBI will issue a registration certificate subject to payment of INR 25 lakh in registration fees. The mutual fund must then pay annual fees to SEBI based on assets under management.

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    Mutual Fund Registration

    Uploaded by

    Paras Mittal
    28 views4 pages
    1) A mutual fund must register with SEBI by submitting an application along with fees of INR 5 lakh. 2) SEBI will examine the application and grant registration once the sponsor meets eligibility criteria such as having a sound track record, fulfilling governance requirements, and contributing 40% of the AMC's net worth. 3) Upon satisfying all conditions, SEBI will issue a registration certificate subject to payment of INR 25 lakh in registration fees. The mutual fund must then pay annual fees to SEBI based on assets under management.

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    Mutual Fund Registration

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    1) A mutual fund must register with SEBI by submitting an application along with fees of INR 5 lakh. 2) SEBI will examine the application and grant registration once the sponsor meets eligibility criteria such as having a sound track record, fulfilling governance requirements, and contributing 40% of the AMC's net worth. 3) Upon satisfying all conditions, SEBI will issue a registration certificate subject to payment of INR 25 lakh in registration fees. The mutual fund must then pay annual fees to SEBI based on assets under management.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    28 views4 pages

    Mutual Fund Registration

    Uploaded by

    Paras Mittal
    1) A mutual fund must register with SEBI by submitting an application along with fees of INR 5 lakh. 2) SEBI will examine the application and grant registration once the sponsor meets eligibility criteria such as having a sound track record, fulfilling governance requirements, and contributing 40% of the AMC's net worth. 3) Upon satisfying all conditions, SEBI will issue a registration certificate subject to payment of INR 25 lakh in registration fees. The mutual fund must then pay annual fees to SEBI based on assets under management.

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    © All Rights Reserved
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    What is Registration of Mutual Fund with SEBI?

     A mutual fund is set up in the form of a trust, which has sponsor,


    trustees, Asset Management Company (AMC) and custodian. The trust is
    established by a sponsor or more than one sponsor who is like promoter of
    a company. The trustees of the mutual fund hold its property for the benefit
    of the unit holders.
     Asset Management Company (AMC) approved by SEBI manages the
    funds by making investments in various types of securities. Custodian, who
    is registered with SEBI, holds the securities of various schemes of the fund
    in its custody. The trustees are vested with the general power of
    superintendence and direction over AMC. They monitor the performance
    and compliance of SEBI Regulations by the mutual fund.
     An applicant proposing to sponsor a mutual fund (MF) in India must
    submit an application in Form A [first schedule of the SEBI (Mutual Funds)
    Regulations, 1996 (hereinafter, referred to as the Regulations)] along with a
    non-refundable fee of INR 5 lakh.
     The application is examined and once the sponsor satisfies the
    eligibility criteria, it is required to complete the remaining formalities for
    setting up a MF. These include inter alia, executing the trust deed and
    investment management agreement, setting up a trustee company/board of
    trustees comprising two-thirds independent trustees, incorporating the
    asset management company (AMC), contributing to at least 40% of the net
    worth of the AMC and appointing a custodian. Upon satisfying these
    conditions, the registration certificate is issued subject to the payment of
    registration fees of INR 25 lakh.

    Procedure for registering a mutual fund with SEBI


    An application for registration of a mutual fund shall be made to the Board
    (SEBI) in Form Aby the sponsor along with the non-refundable fee of INR 5
    lakh.

    Eligibility criteria

    The applicant has to fulfil the following criteria for grant of a


    certificate of registration:

    The sponsor should have a sound track record and general reputation
    of fairness andintegrity in all his business transactions.

    Explanation: For the purposes of this clause "sound track record"


    shall mean thesponsor should

     Be carrying on business in financial services for a period of not less


    than 5 years; and
     The net worth is positive in all the immediately preceding 5 years;
    and
     The net worth in the immediately preceding year is more than the
    capitalcontribution of the sponsor in the asset management company; and
     The sponsor has profits after providing for depreciation, interest and
    tax in 3 out of the immediately preceding 5 years, including the 5 year.
     The applicant is a fit and proper person.
    In the case of an existing mutual fund, such fund is in the form of a
    trust and thetrust deed has been approved by the SEBI;

    The sponsor has contributed or contributes at least 40% to the net


    worth of the asset management company,

    Provided that any person who holds 40% or more of the net worth of an
    assetmanagement company shall be deemed to be a sponsor and will be
    required to fulfil the eligibility criteria specified in these regulations;

     The sponsor or any of its directors or the principle officer to be


    employed by the mutual fund should not have been guilty of fraud or has
    not been convicted of an offence involving moral turpitude or has not been
    found guilty of any economic offence;
     Appointment of trustees to act as trustees for the mutual fund in
    accordance with the provisions of the regulations;
     Appointment of Asset Management Company to manage the mutual
    fund and operate the scheme of such funds in accordance with the
    provisions of these regulations;
     Appointment of custodian in order to keep custody of the securities or
    gold and gold related instrument or other assets of the mutual fund held in
    terms of these regulations, and provide such other custodial services as
    may be authorised by the trustees

    SEBI may register the mutual fund on receipt of all the information and
    accordingly decide to grant acertificate of registration in Form B subject to
    the payment of registration fees of INR 25 lakh.

    A mutual fund shall pay before the 15th April each year an annual fee as
    specified under for every financial year from the year following the year of
    registration
    Average Assets under Management (AAUM)
    Annual Fee
    as on 31 March
    AAUM up to INR 10,000 crore 0.0015% of the AAUM
    0.0010% of the portion of AAUM in excess
    Part of AAUM above INR 10, 000 crore
    of INR 10,000 crore

    Subject to a minimum of INR 2, 50,000 and a Maximum of INR 1, 00,


    00,000.

    Where the sponsor does not satisfy the eligibility criteria SEBI may reject
    the application and inform the applicant of the same.

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