What is the Legal Structure of Mutual Funds ?

In INDIA,Mutual Funds are regulated by the Securities & Exchange Board of India.SEBI has formed “SEBI MF Regulations 1996” to regulate functioning of Mutual Funds.

Mutual funds are well regulated by SEBI. SEBI has formed three tired structure between sponsor, Trustee and Asset Management Company to ensure safety of investor’s money. Different agencies are involved in the functioning of the Mutual funds, like custodian is responsible for safekeeping of securities, transfer agent is responsible for creation of units and other services, Auditors verify that accounting is done properly as per regulations. Brokers are members of stock exchanges who provide services of buying and selling of securities. Trustees are responsible to take care of unit holder’s interest and reporting to SEBI. So the entire functioning doesn’t remain with Asset Management Company or Sponsors.

Regulator(SEBI):-Securities & Exchange Board of India who regulate functioning of Mutual Funds

Sponsor:-is basically promoter of the Mutual Fund Company

Trust:- is Set upped by Promoter & registered under SEBI Asset Management Company:-AMC is created by Promoter under “The companies Act 1956”.

Custodian:- In Mutual funds , Asset Management Company buys different securities in the forms of Shares, bonds, gold etc. in different schemes. These Securities are bought in the name of Trust but they are not kept with the Trust. The responsibility of safe keeping the securities is on the custodian.

Registrar & Transfer Agent:-Registrar & Transfer agent has a responsibility of performing many administrative jobs like processing of applications of investors, creating units when new investment is made, removing units when investors made redemptions, keeping full record of investors, processing dividend payout

Auditor:-An Auditor’s role is to examine books of accounts and annual report of all the schemes as an independent auditor. Asset Management Companies are also required to maintain their books of accounts and get the audit done under The Companies Act, 1956

Brokers:-Brokers are registered members of the stock exchange whose services are utilized by AMCs to buy and sells securities on the stock exchanges.

YOUR QUESTIONS

What is Mutual Fund & Its History ?

A mutual fund is an investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets.

What is the Legal Structure of Mutual Funds ?

The popular investment concept for creating wealth is ‘Start Early. Invest Regularly. Stay invested for Long Term’. Even if the investment is as low as Rs 500, it is important as it marks the beginning of a journey.

Can I start invest in Mutual funds with as low as Rs 100 ?

The popular investment concept for creating wealth is ‘Start Early. Invest Regularly. Stay invested for Long Term’. Even if the investment is as low as Rs 500, it is important as it marks the beginning of a journey.

What is SIP (Systematic Investment Plan) ? & How does it works ?

A Systematic Investment Plan or SIP is a smart and hassle free mode for investing money in mutual funds. SIP allows you to invest a certain Pre-Determined amount at a regular interval (weekly, monthly, quarterly, etc.).

What if one or more SIP installments are missed ?

Well, you need not worry as your SIP would remain active even if you missed 1 or 2 installments due to insufficient amount of balance in your bank account.

Can I withdraw my money at any point of time from Mutual fund?

Yes, open ended mutual fund provides facility to withdraw partial or full amount of money from mutual fund but if it is withdrawn before completing 365 days from investment date than there is exit load up to

Do we need to close SIPs first before withdrawing money ?

No, you can withdraw current value of investment which is being accumulated gradually through SIP, but if three SIP is bounced continuously than SIP get stopped by default.

Will I be Charged Penalties & Exit load(Charges) if I withdraw my investment early?

Open ended mutual funds levy exit load upto 1% of withdrawal value if money is pulled out before completing 365 days from investment date, once investment completes 365 days there is no penalties & or exit load on withdrawal amount,

Can I invest for 1 day, 1 week, 1 month, 1 year, or longer period?

Yes you can definitely invest money for even 1 day duration in liquid mutual fund and there are many fund like ultra-short term, short-term fund where money can be parked as per investor need and there is

What is Short term,Medium term,Long term period of investment ?

There is no prescribed time horizon but generally, Short term is considered the investment horizon of 1-3 years, Medium term horizon is considered 3-6 years of investment, and the investment which has

What is Equity Mutual fund ?

Equity mutual fund invests money in listed Share( Stock & Equity) and fund manager of equity mutual fund constructs a diversified portfolio as per scheme objective and invest certain percentage money of portfolio into different sector or companies

What is Debt & Fixed income Mutual fund ?

Debt-Oriented schemes generally invest in fixed-income securities such as Bonds, Money Market Instruments, Corporate Debentures, Government Securities (Gilts) etc. The objective of these Schemes is

Why one should make investment via Mutual and not directly equities ?

The biggest advantage of investing in mutual funds versus stocks is risk diversification.Every stock is subject to three types of risk: company risk, sector risk and market risk.Company risk and sector risk are

Is there any different type of mutual fund to achieve short term, medium term & long term goal ?

Yes, there are multiple type of mutual fund that caters varieties of need of an investor which depends upon the financial goal & time horizon of investor

What is STP ( Systematic Transfer Plan)?

STP refers to Systematic Transfer Plan where in an investor invests a lump sum amount in one scheme and regularly transfers (i.e. switches) a predefined amount into another scheme. Every month on a

What is SWP ( Systematic Withdrawal Plan)?

Systematic Withdrawal Plan (SWP) is a service offered by mutual funds which provides investors with a specific amount of payout at a pre-determined time intervals, like monthly, quarterly, half-yearly or

How does Mutual fund process works?

A mutual fund is an investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and other assets.

What is Mutual fund unit & NAV and how its calculated ?

Every mutual fund scheme has its own NAV and the units allotted are based on the closing NAV of the day you place your investment. Simply put, NAV is the cost of a single unit (of that particular fund)

what is open ended, Close ended & interval mutual fund

Open ended mutual fund:- is a fund in that an investor is free to invest and withdraw money on prevailing NAV ( Net assets value) at given point of time that means investor has no restriction be remain

Do I need to have Demat account for mutual fund investment ?

No, You do not need to have demat account for mutual investment, on Natex Capital one can invest in best performing mutual fund on a few click with Bank level kind of securities and track each & every

What is ‘KYC’ ( Know your Client)?

KYC is an acronym for "Know Your Customer" and is a term used for Customer Identification Process as a part of Account Opening process with any financial entity. KYC establishes an investor’s identity & address

What is growth option in mutual fund ?

“It is simply a cumulative option. You don’t receive any payouts. Whenever you need the money, you should withdraw the entire or part of your investment,”. The profits are not paid out in between, rather

What is dividend option in mutual fund ?

“Whatever profit is earned by the mutual fund scheme is paid out on a periodic basis in the form of dividend,” This option is recommended to retires or to investors looking for regular income from their

What is ELSS Fund ?

ELSS fund stands for (Equity Link Saving Scheme) its one the tax saving option among all under Income tax Sec 80 C. It’s pure equity based mutual fund and fund invests on predefined investment objective to generate higher return in longer term

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