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Registration of Mutual Fund with SEBI

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What does Mutual Fund Registration with Securities Exchange Board of India (SEBI) mean?

  • A mutual fund shall be established in the form of a trust with investors, administrators, Asset Management Company (AMC) and custodians. A supporter or more than one sponsor, who is like a company's agent, creates the faith. The mutual fund's shareholders retain their properties for the good of the unit holders.
  • SEBI-approved Asset Management Company (AMC) operates the funds by engaging in different equity types. Custodian, who is accredited with SEBI, is in possession of the shares of the fund's various schemes. The trustees are in charge of the overall superintendence and control over AMC. We track the results and enforcement by the collective fu of the SEBI Regulations.
  • An individual wishing to finance a mutual fund (MF) in India shall submit a request in Form A [first schedule of the SEBI (Mutual Funds) Regulations, 1996 (hereinafter referred to as the Regulations)] together with a non-refundable deposit of INR 5 lakh.
  • The proposal shall be reviewed and, once the applicant satisfies the eligibility criteria, the necessary formalities for the creation of an MF shall be concluded. These include the completion of the trust deed and investment management arrangement, the creation of a trustee firm / board of trustees consisting two-thirds of qualified trustees, and the formation of the asset management business (AMC), Contributing to the AMC's net worth of at least 40 percent and naming a custodian. Once these conditions have been met, the certificate of registration shall be given subject to payment of INR 25 lakh registration fees.

What steps are defined for obtaining the registration of mutual fund with Securities Exchange Board of India (SEBI)?

The Board (SEBI) shall apply for the registration of a mutual fund in the form above the sponsor together with the non-refundable charge of INR 5 lakh.

Criteria for obtaining the registration

The claimant may meet the following conditions for issuing a registration certificate:

In all its business transactions, the sponsor should have a clear record and a general credibility for honesty and dignity.

  • Explanation: The word "sound track album" is used for the purposes of this section
  • Business of financial services for a period of not fewer than 5 years; and
  • Net worth is high in all the immediately preceding 5 years;
  • Net worth in the year immediately preceding is greater than the sponsor's stake in the asset management company; the investor had income in 3 of the immediately preceding 5 years, including the 5 year, since accounting for impairment, inflation and vat.
  • The applicant is the right and genuine person.

In the case of an established mutual fund, this investment is in the context of a trust and the SEBI has accepted the trust arrangement;

The investor either added to the asset management company's net worth or invests at least 40%

Provided that any person holding 40% or more of an asset management company's net worth is called a sponsor and is required to meet the eligibility criteria set out in these regulations;

  • The company or any of its administrators or the principal officer paid by the mutual fund should not have been convicted of fraud or convicted of a crime involving moral turpitude or found guilty of any economic offence;
  • Nomination of investors to act as administrators of the mutual fund in compliance with the regulations;
  • Appointment of an Asset Management Firm to administer and run the mutual fund scheme in compliance with these requirements;
  • Appointment of the custodian in order to maintain the custody of the shares or gold- and gold-related instrument or other mutual fund assets held under these regulations and the provision of any other custodial services permitted by the custodians

Upon receipt of all the documents, SEBI can register the mutual fund and therefore agree to issue the registration certificate in Form B subject to payment of INR 25,00,000 registration fees.

Before 15 April each year, the mutual fund shall pay the annual fee as defined for each financial year from the year following the year of registration.

Average Assets under Management (AAUM) as on 31 March Annual Fee
Average Assets under Management (AAUM) up to INR 10,000 crore 0.0015% of the Average Assets under Management (AAUM)
Part of Average Assets under Management (AAUM) above INR 10, 000 crore 0.0010% of the portion of Average Assets under Management (AAUM) in excess of INR 10,000 crore

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

If the sponsor fails to meet the eligibility criteria, Securities Exchange Board of India (SEBI) can refuse the application and notify the applicant of the same.

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