vap_amfi_unit ii_dj

8/14/2019 VAP_AMFI_Unit II_DJ

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VALUE ADDED PROGRAM

AMFIUnit II


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LEGAL STRUCTURE OFMUTUAL FUNDS

All mutual funds areconstituted as

unit-trusts

All funds are governed by SEBI .


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FUND SPONSOR

Any person who establishes a mutualfund.

Like promoter of a company,

contributes to initial capital Gets fund registered with SEBI. Forms a trust, appoints board of

trustees Usually appoints (along with trustees)Asset Management Company (AMC) asfund managers


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TRUSTS

Created under the Indian Trusts Act, 1882 Appointed by sponsor Holds assets for benefit of unit-holders

(beneficiaries of the trust) Pass- through vehicle. Has no independent legal capacity(trustees have it)


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TRUSTEES

Manage the trust, protector of unit holdersinterest.

Board of trustees may be body of individuals or

a corporate body. Board of trustees is governed by the IndianTrusts Act

Trustee corporate body also complies with

Companies Act 1956. Do not directly manage investment, appoint AMC.


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RIGHTS & OBLIGATIONS OF TRUSTEES Approve schemes of fund Ensure management of funds according

to SEBI regulations Compliance with Trust Deed Furnish reports on funds activities to

SEBI, on a half-yearly basis. Safeguard interests of unit-holders


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SEBI SPECIFIES-

Trustees obligations as

General Due Diligence: protecting trust properties regular functioning

Specific Due Diligence: appoint internal auditors & obtain audit

reports


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AMC

investment manager of the trust Appointed by sponsor/trustees, approved

by SEBI.

As per SEBIs mandate, 50% of thedirectors should be independent. Must protect interest of investors Reports to trustees. Total net worth must be atleast Rs 10

crores


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continued

Update each days NAV on AMFIswebsite by 8.00 pm on the relevant day& the month-end AUM figure on the

first working day of next month.


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INDEPENDENT DIRECTORS &TRUSTEES

Pay attention to investment management& compensation paid under it.

Ensure higher than market level feeshas not been charged to the fund

Oversee selection of other independent

directors


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CUSTODIANS

Ownership of units is in dematerializedform, held by a depository.

A funds physical securities are held bya custodian.

Deliveries of funds securities take placeat the instruction of the AMC.


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REGISTRARS & TRANSFERAGENTS Prepare transfer documents & update

investor records. May be done in-house or outsourced. Includes buying/repurchase of units,

switching schemes, systematicinvestment/withdrawals, bank details etc

(tasks apart from investmentmanagement)


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DISTRIBUTORS

Sell units to individual investors on behalfof the fund.

A distributor usually acts on behalf of

several MFs Has several sub-brokers Includes individuals agents; in terms of

number-largest distributor segment. Banks, NBFCs, distribution companies

account for bulk of volume.


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FUND MERGERS & TAKEOVERS

No special guidelines But merger is viewed as changes in

fundamental attributes How may a MF change? Merger of two AMCs AMC takeover by new sponsors Scheme takeover (by another AMC)


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THANKYOU !!

vap_amfi_unit ii_dj

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