Structure and Role of Mutual Funds in India
Mutual funds are regulated in India by SEBI (Securities and Exchange Board of India). Mutual Funds essentially comprises of an AMC (Asset Management Company). AMC has professional experts who Invest the investors’ money in various debt and equity instruments. AMC is governed by trustees. In India, Mutual funds is a trust business and they are governed by Indian Trust Act, 1882. Role of Trustees is to ensure that Investors interest is protected. Trustees keep monitoring the activities of the AMC. Investor can invest in mutual funds through distributors like MUTUALFUNDWALA.
What is the role of Trustees in Mutual Funds ?
- Protecting the interest of the investors
- Appointing the AMC (Asset Management Company)
- Execute an investment management agreement with AMC (Asset management company)
- Appointment of a custodian
What does an AMC (Asset Management Company) do?
- Day to day operations of asset management.
- Managing the scheme as per its objectives.
- Maintain record of investors and their unit-holding
- Appointment of a registrar and transfer agent (RTA). Eg, CAMS, Karvy etc.
Who is a Custodian?
- Custodian is responsible for holding and safeguarding the securities owned within a mutual fund scheme.
- Track dividends, bonus and rights in companies where the fund/scheme has invested.
Role of RTA (registrar and transfer agent)
- Maintains records of Unit Holders in various schemes.
- Handling documentation of investors with regards to purchase. Sale, switch etc of unit holders.
- RTA’s also provide points of Service (POS), as they have several branches spread across the country.
Role of Distributors/Agents like MutualFundWala
- Decimating information about various mutual funds schemes.
- Provide service to investors for purchase, redemption, switch etc in various Mutual Fund schemes.
- Settle all other service related queries like change of nomination, KYC updation, change of address etc..
- Guide investor periodically to maximize returns and minimize risk.