vap_amfi_unit ii_dj
TRANSCRIPT
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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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continued
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 !!