SECURITIES AND EXCHANGE BOARD OF INDIA (COLLECTIVE INVESTMENT SCHEMES) REGULATIONS, 1999
.(1) These regulations may be called the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999.
(2) They shall come into force on the date of their publication in the Official Gazette.
.(1) In these regulations, unless the context otherwise requires:
(a) "Act" means the Securities and Exchange Board of India, Act 1992 (15 of 1992);
(b) "advertisement" includes:
i. notices, brochures, pamphlets, circulars, showcards, catalogues, hoardings, placards, posters, insertions in newspapers, pictures, films and cover pages of offer documents;
ii. any other matter to which publicity is given through print medium, radio, television programmes or electronic media;
(c) "appraising agency" means an agency empanelled with the Board for the purpose of conducting technical or financial appraisal of the scheme;
(d) "associate" in relation to a collectiv
No person other than a Collective Investment Management Company which has obtained a certificate under these regulations shall carry on or sponsor or launch a collective investment scheme.
Any person proposing to carry any activity as a Collective Investment Management Company on or after the commencement of these regulations shall make an application to the Board for the grant of registration in Form A.
.(1) Any person who immediately prior to the commencement of these regulations was operating a scheme, shall subject to the provisions of Chapter IX of these regulations make an application to the Board for the grant of a certificate within a period of two months from such date.
(2) An application under sub-regulation (1) shall contain such particulars as are specified in Form A and shall be treated as an application made in pursuance of regulation 4 and dealt with accordingly.
Every application for registration under regulation 4 shall be accompanied by a non-refundable application fee as specified in the Second Schedule.
An application, which is not complete in all respects or does not conform to the requirements of regulation 6 or regulation 9 shall be rejected by the Board.
Provided that before rejecting any such application, the applicant may be given an opportunity to remove within one month such objections as may be indicated by the Board.
Provided further that the Board may on sufficient reasons being shown extend the time in order to enable the applicant to remove such objections.
.(1) The Board may direct the applicant to furnish such further information or clarification as may be required by it, for the purpose of processing the application.
(2) The Board, if it so desires, may ask the applicant or its authorised representative to appear before the Board for personal representation in connection with the grant of a certificate.
The Board shall not consider an application for the grant of a certificate unless the applicant satisfies the following conditions, namely:-
a. the applicant is set up and registered as a company under the Companies Act, 1956;
b. the applicant has, in its Memorandum of Association specified the managing of collective investment scheme as one of its main objects;
the applicant has a net worth of not less than rupees five crores;
Provided that at the time of making the application the applicant shall have a minimum net worth of rupees three crores which shall be increased to rupees five crores within three years from the date of grant of registration
c. the applicant is a fit and proper person for th
(k) in case the applicant is an existing collective investment scheme, it complies with the provisions of Chapter IX of these regulations.
(1) The Board may, on receipt of an application and on being satisfied that the applicant complies with the requirements specified in regulation 9, call upon the applicant to pay registration fee as specified in the Second Schedule.
(2) On receipt of registration fee, the Board shall grant a certificate in Form B, on such terms and conditions as are in the interest of investors and as may be specified by the Board.
The certificate granted under regulation 10 shall be subject to the following conditions, namely :-
(a) any director of the Collective Investment Management Company shall not be a director in any other Collective Investment Management Company unless such person is an independent director referred to in clause (g) of regulation 9 and approval of the board of Collective Investment Management Companies of which such person is an independent director, has been obtained;
(b) the Collective Investment Management Company shall forthwith inform the Board of any material change in the information or particulars previously furnished, which have a bearing on the certificate granted by it;
(c) appointment of a director of a Collective Investment Management Company shall be made with the prior approv
.(1) Where an application made under regulation 4 for grant of registration does not satisfy the conditions specified in regulation 9, the Board may reject the application after giving the applicant a reasonable opportunity of being heard and inform the applicant of the same.
(2) The decision shall be communicated to the applicant by the Board within 30 days of such decision stating therein the grounds on which the application has been rejected.
The Collective Investment Management Company shall not:
(a) undertake any activity other than that of managing the scheme;
(b) act as a trustee of any scheme;
c. launch any scheme for the purpose of investing in securities;
d. invest in any schemes floated by it.
Provided that a Collective Investment Management Company may invest in its own scheme,
(i) if it makes a disclosure of its intention to invest in the offer document of the scheme, and
(ii) does not charge any fees on its investment in that scheme.
14. Every Collective Investment Management Company shall:
a. be responsible for managing the funds or properties of the scheme on behalf of the unit holders;
b. take all reasonable steps and exercise due diligence to ensure that the scheme is managed in accordance with the provisions of these regulations, offer document and the trust deed;
c. exercise due diligence and care in managing assets and funds of the scheme;
d. be responsible for the acts of commissions and omissions by its employees or the persons whose services have been availed by it;
e. remain liable to the unit holders for its acts of commission or omissions, notwithstanding anything contained in any contract or agreement;
.(1) The Collective Investment Management Company shall prepare quarterly reports (i.e. as at the end of March, June, September and December) on its activities and the position regarding compliance with these regulations and submit the same to the trustees within one month of the expiry of each quarter.
(2) The Collective Investment Management Company shall file with the trustee and the Board -
a. particulars of all its directors alongwith their interest in other companies within fifteen days of their appointment; and
b. any change in the interests of directors, within fifteen days of such change.
3. The Collective Investment Management Company shall furnish a copy of the Balance Sheet, Profit and Loss Account and a copy of the summary of the y
.(1) A scheme shall be constituted in the form of a trust and the instrument of trust shall be in the form of a deed duly registered under the provisions of the Indian Registration Act, 1908 (16 of 1908) executed by the Collective Investment Management Company in favour of the trustees named in such an instrument.
(2) A Collective Investment Management Company shall appoint a trustee who shall hold the assets of the scheme for the benefit of unit holders.
(1) The trust deed shall contain such clauses as are specified in the Fourth Schedule and such other clauses as are necessary for safeguarding the interests of the unit holders.
(2) No trust deed shall contain a clause which has the effect of-
(i) limiting or extinguishing the obligations and liabilities of the Collective Investment Management Company in relation to any scheme or the unit holders; or
(ii) indemnifying the trustee or the Collective Investment Management Company for loss or damage caused to the unit holders by their acts of negligence or acts of commissions or omissions.
.(1) Only persons registered with the Board as Debenture Trustee under Securities and Exchange Board of India (Debenture Trustee) Regulations, 1993 shall be eligible to be appointed as trustees of collective investment scheme.
Provided that no person shall be eligible to be appointed as trustee, if he is directly or indirectly associated with the persons who have control over the collective investment management company.
(2) The Collective Investment Management Company shall furnish to the Board particulars as specified in Form C in
respect of trustees appointed under sub-regulation (1).
No person shall be appointed as trustee of a scheme if -
a. He has been found guilty of an offence under the securities laws or
b. The Board or any authority to which the Board has delegated its power has passed against such person, an order under the Act for violation of any provision of the Act or of regulations made hereunder.
.(1) The trustee and the Collective Investment Management Company shall enter into an agreement for managing the scheme property.
(2) The agreement for managing the scheme property shall contain such clauses as are specified in the Fifth Schedule and such other clauses as are necessary for the purpose of fulfilling the objectives of the scheme.
(a) to obtain from the Collective Investment Management Company such information as is considered necessary by the trustee.
(b) to inspect the books of accounts and other records relating to the scheme.
(2) The trustee shall ensure that the Collective Investment Management Company has;-
(a) the necessary office infrastructure;
(b) appointed all key personnel including managers for the schemes and submitted their bio-data which shall contain the educational qualifications and past experience in the areas relevant for fulfilling the objectives of the schemes;
(c) appointed auditors to audit the accounts of the scheme from the list of auditors approved by the Board;
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.(1) The trusteeship of a trustee shall come to an end -
a. If the trustee ceases to be trustee under the Securities and Exchange Board of India (Debentures Trustees) Regulations, 1993; or
b. if the trustee is in the course of being wound up; or
c. if unit holders holding at least three-fourths of the nominal value of the unit capital of the scheme pass a resolution for removing the trustee and the Board approves such resolution; or
d. if in the interest of the unit holders, the Board, for reasons to be recorded in writing decides to remove the trustee for any violation of the Act or these regulations committed by them; or
Provided that the trustee shall be afforded reasonable opportunity of hearin
.(1) The agreement referred to in regulation 20 entered into by the trustee with the Collective Investment Management Company may be terminated -
(a) if the Collective Investment Management Company is in the course of being wound up as per the provisions of the Companies Act, 1956 or;
(b) if unit holders holding at least three-fourths of the nominal value of the unit capital of the scheme pass a resolution for terminating the agreement with the Collective Investment Management Company and the prior approval of the Board has been obtained, or
(c) if in the interest of the unit holders the Board or the trustee, after obtaining prior approval of the Board, and after giving an opportunity of being heard to the Collective Investment Management Company, decide to terminate the agreement with the
.(1) No scheme shall be launched by the Collective Investment Management Company unless such scheme is approved by the Trustee.
Rating
(2) No scheme shall be launched by the Collective Investment Management Company without obtaining rating from a credit rating agency.
Appraisal
(3) No scheme shall be launched by the Collective Investment Management Company without getting the scheme appraised by an appraising agency.
4. Collective Investment Management Company shall:-
a. Launch only close ended schemes;
b. the duration of the schemes shall not be of less than three calendar years.
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No scheme shall provide guaranteed or assured returns.
Provided that indicative return may be indicated in the offer document only, if the same is assessed by the appraising agency and expressed in monetary terms.
.(1) The Collective Investment Management Company shall before launching any scheme file a copy of the offer document of the scheme as referred to in sub-regulation (1) of regulation 24 with the Board and pay filing fees as specified in the Second Schedule.
(2) The offer document shall contain such information as specified in the Sixth Schedule.
(3) The offer document shall also contain true and fair view of the scheme and adequate disclosures to enable the investors to make informed decision.
(4) The Board may in the interest of investors require the Collective Investment Management Company to carry out such modifications in the offer document as it deems fit.
(5) In case no modifications are suggested by the Board in the offer document with
(1) Advertisements in respect of every scheme shall be in conformity with the Advertisement Code as specified in the Seventh Schedule.
(2) The advertisement for each scheme shall disclose in addition to the investment objectives, the method and periodicity of valuation of scheme property.
The appraising agency whose appraisal report forms part of the offer document and has given a written consent for the inclusion of the appraisal report in the offer document shall be liable for any statement in the appraisal report which is misleading, incorrect or false.
.(1) The offer document and advertisement materials shall not be misleading or contain any statement or opinion which are incorrect or false.
(2) Where an offer document or advertisement includes any statement or opinion which are incorrect or false or misleading, every person -
(i)who is a director of the Collective Investment Management Company at the time of the issue of the offer document;
(ii) who has issued the offer document and shall be punishable under the Act unless he proves either that the statement or opinion was immaterial or that he had reasonable ground to believe at the time of the issue of the offer document or advertisement that the statement was true.
No scheme shall be open for subscription for more than 90 days.
.(1) The Collective Investment Management Company shall specify in the offer document, -
(a) the minimum and the maximum subscription amount it seeks to raise under the scheme; and
(b) in case of oversubscription the process of allotment of the amount oversubscribed.
(2) The Collective Investment Management Company shall refund the application money to the applicants,-
(i) if the scheme fails to receive the minimum subscription amount referred to in clause (a) of sub-regulation (1).
(3) Any amount refundable under sub-regulation (2) shall be refunded within a period of six weeks from the date of closure of subscription list, by Registered A.D and by cheque or demand draft marked "A/C. Payee" to the
The Collective Investment Management Company shall issue to the applicant whose application has been accepted, unit certificates as soon as possible but not later than six weeks from the date of closure of the subscription list.
Provided that if the units are issued through a depository, a receipt in lieu of unit certificate will be issued as per provisions of Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 and bye-laws of the depository.
.(1) A unit certificate issued under the scheme shall be freely transferable.
(2) The Collective Investment Management Company shall, on production of instrument of transfer together with relevant unit certificates, register the transfer and return the unit certificate to the transferee within thirty days from the date of such production.
Provided that if the units are held in a depository such units shall be transferable in accordance with the provisions of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996 and the bye-laws of the depository.
.(1) The subscription amount received shall be kept in a separate bank account in the name of the scheme and shall be utilised for-
(a) adjustment against allotment of units only after the trustee has received a statement from the registrars to the issue and share transfer agent regarding minimum subscription amount, as stated in the offer document, having been received from the public, or
(b) for refund of money in case minimum subscription amount, as stated in the offer document, has not been received or in case of over-subscription.
(2) The minimum subscription amount as specified in the offer document shall not be less than the minimum amount, as specified by the appraising agency, needed for completion of the project for which the scheme is being launched.
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35. The Collective Investment Management Company shall:
a. not invest the funds of the scheme for purposes other than the objective of the scheme as disclosed in the offer document.
b. segregate the scheme assets of different schemes.
c. not invest corpus of a scheme in other schemes.
d. not transfer funds from one scheme to another scheme.
Provided that inter scheme transfer of scheme property may be permitted at the time of termination of the scheme with prior approval of the trustee and the Board.
The units of every scheme shall be listed immediately after the date of allotment of units and not later than six weeks from the date of closure of the scheme on each of the stock exchanges as mentioned in the offer document.
(1) A scheme shall be wound up on the expiry of duration specified in the scheme or on the accomplishment of the purpose of the scheme.
(2) Notwithstanding anything contained in sub-regulation (1), a scheme may also be wound up -
(a) on the happening of any event which, in the opinion of the trustee, requires the scheme to be wound up and the prior approval of the Board is obtained; or
(b) if unit holders of a scheme holding at least three-fourth of the nominal value of the unit capital of the scheme pass a resolution that the scheme be wound up and the approval of the Board is obtained; or
c. if in the opinion of the Board, the continuance of the scheme is prejudicial to the interests of the unit-holders; or
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On and from the date of the publication of notice under sub-regulation (3) of regulation 37, the trustee or the Collective Investment Management Company as the case may be, shall cease to carry on any business activities in respect of the scheme so wound up.
If, after the receipt of the report under sub-regulation (5) of regulation 37, the Board is satisfied that all the measures for winding up of the scheme have been complied with, the scheme shall cease to exist.
.(1) Every Collective Investment Management Company shall -
a. keep and maintain proper books of accounts, records and documents, for each scheme so as to explain its transactions and to disclose at any point of time the financial position of each scheme and in particular give a true and fair view of the state of affairs of the scheme and
b. intimate to the Board and the trustees the place where such books of accounts, records and documents including computer records are maintained.
(2) Every Collective Investment Management Company shall continue to maintain and preserve, for a period of five years after the close of each scheme, its books of accounts, records, computer data and documents.
The financial year for all the schemes shall end as of March 31 of each year.
The Collective Investment Management Company shall,
a. despatch to the unit holders the warrants within 42 days of the declaration of the interim returns.
b. Despatch the redemption proceeds within 30 days of the closure or the winding up of the scheme.
a. not exceed the ceilings on expenses or fees in respect of the scheme as specified in Part-I of the Ninth Schedule.
b. prepare the accounts of the scheme in accordance with accounting norms as specified in Part-II of the Ninth Schedule;
c. comply with format of balance sheet and profit and loss accounts as specified in Part-III of the Ninth Schedule;
2. An annual report and annual statement of accounts of each scheme shall be prepared in respect of each financial year.
(3) Every Collective Investment Management Company shall within two months from the date of closure of each financial year forward to the Board a copy of the Annual Report.
.(1) Every scheme shall have the annual statement of accounts audited by an auditor who is empanelled with the Board and who is not in any way associated with the auditor of the Collective Investment Management Company.
(2) The auditor shall be appointed by the trustee.
(3) The auditor shall forward his report to the trustee and such report shall form part of the Annual Report of the scheme.
(4) The auditor's report shall comprise the following:-
(a) a certificate to the effect that:-
(i) he has obtained all information and explanations which, to the best of his knowledge and belief, were necessary for the purpose of the audit;
(ii) the balance sheet an
(1) The auditor of the scheme shall, as soon as possible, notify the Board and the trustee in writing if he has reasonable grounds to suspect that a contravention of the regulations has occurred or if the schemes are not conducted on sound commercial principles.
(2) The auditor of the scheme:
(a) shall have a right of access at all reasonable times to the books of the scheme; and
(b) may require any employee of the Collective Investment Management Company to give the auditor information and explanations for the purposes of the audit.
.(1) The trustee, after prior approval of the trustee and for reasons to be recorded in writing remove the auditor of the scheme for misconduct or inefficiency after giving the auditor a reasonable opportunity of hearing.
Provided that another auditor for the scheme is appointed by trustee immediately from auditors empanelled with the Board.
(2) The auditor of the scheme may resign by giving a three months written notice to the Collective Investment Management Company and to the trustee.
.(1) The scheme wise annual report or an abridged form thereof shall be published in a national daily as soon as possible but not later than two calendar months from the date of finalisation of accounts.
(2) The annual report shall contain details as specified in the Ninth Schedule and such other details as are necessary for the purpose of providing a true and fair view of the operations of the collective investment scheme.
(3)The report if published in abridged form shall carry a note that full annual report shall be available for inspection at the Head Office and all branch offices of the Collective Investment Management Company.
.(1) The Collective Investment Management Company and the trustee, shall make such disclosures or submit such documents as they may be called upon by the Board to make or submit.
(2) Without prejudice to the generality of sub-regulation (1), the Collective Investment Management Company on behalf of the scheme shall furnish the following periodic reports to the Board, namely:
(a) copies of the duly audited annual statements of accounts including the balance sheet and the profit and loss account in respect of each scheme, once a year;
(b) a copy of quarterly unaudited accounts;
(c) a quarterly statement of changes in net assets for each of the schemes.
A Collective Investment Management Company, on behalf of the scheme shall before the expiry of one month from the close of each quarter that is 31st March, 30th June, 30th September and 31st December publish its unaudited financial results in one daily newspaper having nation wide circulation and in a newspaper published in the language of the region where the Head Office of the Collective Investment Management Company is situated.
Provided that the quarterly unaudited report referred in this sub-regulation shall contain details as specified in the regulations and such other details as are necessary for the purpose of providing a true and fair view of the operations of the scheme.
The trustee shall ensure that the Collective Investment Management Company shall make such disclosures to the unit holders as are essential in order to keep them informed about any matter which may have an adverse bearing on their investments.
The calling of meeting of unit holders as well as transfer and transmission of units of scheme shall be as per the provisions of the Eighth Schedule.
.(1) The Board may appoint one or more persons as inspecting officer to undertake the inspection of the books of accounts, records, documents and infrastructure, systems and procedures or to investigate the affairs of the trustee and Collective Investment Management Company for any of the following purposes, namely:
(a) to ensure that the books of accounts are being maintained by the Collective Investment Management Company in the manner specified in these regulations;
(b) to ascertain whether the provisions of the Act and these regulations are being complied with by the trustee and Collective Investment Management Company;
(c) to ascertain whether the systems, procedures and safeguards followed by the Collective Investment Management Company are adequate;
(1) Before ordering an inspection under regulation 52 the Board shall give not less than ten days notice to the Collective Investment Management Company or trustee as the case may be.
(2) Notwithstanding anything contained in sub-regulation (1), where the Board is satisfied that in the interest of the investors no such notice is required to be given, it may, by an order in writing direct that such inspection or investigation be taken up immediately without any notice.
(3) During the course of inspection or investigation, the trustee or Collective Investment Management Company against whom the inspection or investigation is being carried out shall be bound to discharge his obligations as provided in regulation 54.
(1) It shall be the duty of the trustee or Collective Investment Management Company whose affairs are being inspected or investigated, and of every director, officer and employee thereof, to produce such books, accounts, records, and other documents in its custody or control and furnish him such statements and information relating to the activities as trustee or Collective Investment Management Company, as the inspecting officer may require, within such reasonable period as the inspecting officer may specify.
(2) The trustee or Collective Investment Management Company shall allow the inspecting officer to have a reasonable access to the premises occupied by it or by any other person on its behalf and also provide necessary infrastructure for examining any books, records, documents, and computer data in the possession of the trustee and Collective Investment Management Company or s
The inspecting officer shall, on completion of the inspection or investigation, submit a report to the Board:
Provided that if directed to do so by the Board, he shall submit interim reports also.
The Board or the Chairman shall after consideration of inspection or investigation report take such action as the Board or Chairman may deem fit and appropriate including action under the Securities and Exchange Board of India ( Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations,2002.]
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1. Substituted by SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002 w.e.f. 27.09.2002. Prior to substitution it read as under :
Communications of findings, etc.
56.(1) The Board shall, after consideration of the report referred to in regulation 55, communicate the findings to the trustee or Collective Investment M
(1) Without prejudice to the provisions of regulation 52, the Board shall have the power to appoint an auditor to inspect or investigate, as the case may be, into the books of accounts or the affairs of the trustee or Collective Investment Management Company in respect of schemes:
Provided that the Auditor so appointed shall have the same powers of the inspecting officer as stated in regulation 52 and the obligation of the Collective Investment Management Company or trustee and their respective employees in regulation 54, shall be applicable to the inspection under this regulation.
(2) The Board shall be entitled to recover such expenses including fees paid to the auditors as may be incurred by it for the purposes of inspecting the books of accounts, records and documents of the trustee or Collective Investment Management Company.
In case a Collective Investment Management Company -
(a) contravenes any provision of the Act or these regulations;
(b) for the purposes of these regulations furnishes any information which is false or misleading or suppresses any material information;
(c) does not co-operate in any inspection, investigation or inquiry conducted by the Board under the Act or these regulations;
(d) fails to comply with any directions issued by the Board under the Act or the regulations;
(e) fails to resolve the complaints of the investors or fails to furnish to the Board a satisfactory reply in this behalf when called upon to do so by the Board;
(f) commits a breach of any provi
No order of suspension or cancellation of certificate shall be made by the competent authority against the Collective Investment Management Company except after holding an enquiry in accordance with the procedure specified in regulation 62.
Provided that the holding of an enquiry shall not be necessary in the following cases:
a. where the company is declared insolvent or is wound up;
b. where the company fails to pay fees to the Board;
c. where the agreement for managing the scheme property is terminated;
d. where the company surrenders its certificate of registration to the Board;
e. where the company fails to maintain the net wo
.(1) Where action under regulation 59 or 60 is proposed, the competent authority shall issue to the Collective Investment Management Company, at its registered office or its principal place of business, a notice setting out the grounds on which the action is proposed to be taken against it and calling it to show cause against such action within a period of fourteen days from the date of receipt of the notice.
(2) The competent authority shall give a reasonable opportunity of hearing to the Collective Investment Management Company to enable it to make submissions in support of his reply to its notice issued under sub-regulation
(3) Before the competent authority, the Collective Investment Management Company may either appear in person or through any person duly authorised on his behalf;
Pr
(1) On and from the date of the suspension of the certificate, the Collective Investment Management Company shall cease to carry on any activity during the period of suspension, and shall be subject to the directions of the Board with regard to any records, documents, or assets that may be in its custody or control, relating to its activities.
(2) On and from the date of cancellation of the certificate, the Collective Investment Management Company shall, cease to carry on any activity.
The order of suspension or cancellation passed under sub-regulation (6) of regulation 62, shall be published by the Board in two newspapers of which at least one shall have nation wide circulation.
The Board may, in the interests of the securities market and the investors and without prejudice to its right to initiate action under this Chapter, including initiation of criminal prosecution under section 24 of the Act, give such directions as it deems fit in order to ensure effective observance of these regulations, including directions,:
a. requiring the person concerned not to collect any money from investors or to launch any scheme;
b. prohibiting the person concerned from disposing of any of the properties of the scheme acquired in violation of these regulations;
c. requiring the person concerned to dispose of the assets of the scheme in a manner as may be specified in the directions;
d. requiring the person concerned to refund any mon
The Board may initiate action for suspension or cancellation of registration of an intermediary holding a certificate of registration under section 12 of the Act who fails to exercise due diligence in the performance of its functions or fails to comply with its obligations under these regulations:
Provided that no such certificate of registration shall be suspended or cancelled unless the procedure specified in the regulations applicable to such intermediary is complied with.
[Any person aggrieved by an order of the Board made, on and after the commencement of the Securities Laws (Second Amendment) Act, 1999 (ie., after 16th December 1999), under these regulations may prefer an appeal to a Securities Appellate Tribunal having jurisdiction in the matter]2
2 Substituted for the earlier provision vide SEBI(Appeal to Securities Appellate Tribunal) (Amendment) Regulations, 2000 vide S.O.278(E) dated 28.3.2000
.(1) Any person who has been operating a collective investment scheme at the time of commencement of these regulations shall be deemed to be an existing collective investment scheme and shall also comply with the provisions of this Chapter.
Explanation: The expression `operating a collective investment scheme' shall include carrying out the obligations undertaken in the various documents entered into with the investors who have subscribed to the scheme.
An existing collective investment scheme shall make an application to the Board in the manner specified in regulation. 5.
2. The application made under sub-regulation (2) shall be dealt with in any of the following manner:
a. by grant of provi
No existing collective investment scheme shall launch any new scheme or raise money from the investors even under the existing scheme, unless a certificate of registration is granted to it by the Board under regulation 10.
Consideration of application for grant of provisional registration
.(1) The applicant for the purpose of being considered eligible for the grant of provisional registration shall satisfy the Board that
a. the schemes of the applicant are in the nature of collective investment schemes;
b. the affairs of the applicant are not being conducted in a manner detrimental to the interest of existing investors;
c. the applicant has atleast 50% independent directors at the time of making the application;
Explanation:- "Independent directors" shall mean directors who are not associates of the persons operating the existing collective investment scheme.
(d) any person, directly or indirectly connected with it has not been granted registration by the Board under the Act;
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The Board after being satisfied that the conditions specified in regulation 70 are fulfilled may grant provisional registration to the applicant subject to the following conditions, namely:-
(a) the applicant shall get the existing schemes rated by a credit rating agency within 1[two] year from the date of grant of provisional registration;
(b) the applicant shall get the existing schemes audited by an auditor within a period of 1[two] year from the date of grant of provisional registration;
(c) the applicant shall get existing schemes appraised by an appraising agency within a period of 1[two] year from the date of grant of provisional registration;
(d) the applicant shall create a trust and appoint trustees in the manner specified in Chapt
.(1) An existing Collective Investment Scheme which satisfies the Board that the requirements specified in regulation 9 and the conditions specified under regulation 71 have been fulfilled, shall be granted a certificate of registration under regulation 10 upon payment of registration fees as specified in paragraph 2 of the Second Schedule and on such terms and conditions as may be specified by the Board.
(2) An existing collective investment scheme which has been granted certificate of registration under sub-regulation (1) may be allowed to float new schemes on such terms and conditions as may be specified by the Board.
(1) An existing collective investment scheme which;
a. has failed to make an application for registration to the Board; or
b. has not been granted provisional registration by the Board; or
c. having obtained provisional registration fails to comply with the provisions of regulation 71; shall wind up the existing scheme.
2. The existing collective investment scheme to be wound up under sub-regulation (1) shall send an information memorandum to the investors who have subscribed to the schemes, within two months from the date of receipt of intimation from the Board, detailing the state of affairs of the scheme, the amount repayable to each investor and the manner in which such amount is determined.
3.
An existing collective investment scheme which is not desirous of obtaining provisional registration from the Board shall formulate a scheme of repayment and make such repayment to the existing investors in the manner specified in regulation
In order to remove any difficulties in the application or interpretation of these regulations, the Board shall have the power to issue clarifications and guidelines in the form of notes or circulars which shall be binding on the trustee or Collective Investment Management Company or any other intermediary in the capital market.
FORM C
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME) REGULATIONS, 1999
[Regulation 18(2)]
TRUSTEESHIP OF THE COLLECTION INVESTMENT SCHEME
1] Furnish the following particulars:
[a] Name of the Institution
[b] Address/telephone/telex/fax nos.
[c] Name of the contact person
[d] SEBI Registration No.:
[e] Management of the trustee
Board of Directors
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SECOND SCHEDULE
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME) REGULATIONS, 1999
[Regulations 6, 10, 26(1), 59(g), 71(3), 72(1)]
FEES
1.(a) Application fees payable by the
applicant: Rupees Twenty- Five Thousand
(b) Provisional registration fees payable
by existing collective investment scheme: Rupees Five Lacs
[see para 2 below]
(c) Registration fees payable by the applicant
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THIRD SCHEDULE
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME) REGULATIONS, 1999
[Regulations 14(h), 21(8), 59(f)]
CODE OF CONDUCT
1. Interests of all classes of unit holders to be protected
The organisation, operation and management of the Collective Investment Scheme and the creation of assets therein shall be conducted -
a. in the interest of all classes of unit holders of the scheme and
b. not merely in the interests of the directors of the company or associated persons or any special class of
FOURTH SCHEDULE
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME ) REGULATIONS, 1999
[Regulation 17(1)]
CONTENTS OF THE TRUST DEED
Principal Clauses
The Trust Deed shall contain the following clauses, namely:-
[a] the responsibilities, obligations and rights of the trustee for the protection of the assets of the scheme.
[b] provisions to ensure that management of scheme property shall be in accordance with that specified in the offer document and these regulations.
FIFTH SCHEDULE
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME) REGULATIONS, 1999
[Regulation 20(2)]
CONTENTS OF THE AGREEMENT FOR MANAGING SCHEME PROPERTY
The Investment Management Agreement shall contain the following clauses namely:-
1. Obligations of the Collective Investment Management Company:
The Collective Investment Management Company
(a) shall be responsible for floating schemes after obtaining approval from the trustee and managing the funds mobilised under various schemes, in accordance
SIXTH SCHEDULE
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME ) REGULATIONS, 1999
[Regulation 26(2)]
CONTENTS OF THE OFFER DOCUMENT
1. Contents
The offer document filed with the Board shall contain, in addition to the requirements specified in the regulations, following information so as to enable the investors to make a true, fair and informed decision on the investments in the scheme, namely:
1. Outer Cover Pages
1.1. Front Outer cover Page
i) The front outer cover page of the offer document file
SEVENTH SCHEDULE
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME ) REGULATIONS, 1999
[Regulation 27(1)]
ADVERTISEMENT CODE
1) A scheme advertisement shall:
a) be truthful, fair and clear and shall not contain any statement which is untrue or misleading.
b) be set forth in a clear, concise and understandable language. Extensive use of technical, legal terminology or complex language and the inclusion of excessive details which may detract the investor, shall be avoided.
EIGHTH SCHEDULE
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME ) REGULATIONS, 1999
[Regulation 51]
PROCEDURE FOR CONDUCT OF MEETINGS
MEETINGS:
Procedure relating to conduct of meeting are as follows:
The trustee or unit holders holding one-tenth in nominal value of the unit capital of the scheme may call a meeting of the unit holders in the manner as set out below.
i) Within 21 days of the receipt of the notice from the unit holders, the trustee shall call a meeting of the unit holders by causing
NINTH SCHEDULE
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME ) REGULATIONS, 1999
ACCOUNTING NORMS, INVESTMENTS AND EXPENSE CEILING
[Regulations 21(13), 43(1), 44(4)(iii), 71(1)(e)]
PART I - CEILING ON EXPENSES
The expenses incurred shall be subject to a ceiling as specified below:
(1) Initial Issue Expenses
(a) These may include:
" cost of offer documents and related costs;
" marketing and selling expenses
NINTH SCHEDULE
SECURITIES AND EXCHANGE BOARD OF INDIA
(COLLECTIVE INVESTMENT SCHEME ) REGULATIONS, 1999
ACCOUNTING NORMS, INVESTMENTS AND EXPENSE CEILING
[Regulations 21(13), 43(1), 44(4)(iii), 71(1)(e)]
PART I - CEILING ON EXPENSES
The expenses incurred shall be subject to a ceiling as specified below:
(1) Initial Issue Expenses
(a) These may include:
" cost of offer documents and related costs;
" marketing and selling expenses
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