While most common investors in india are now well aware of the powerful concept of mutual funds, they usually associate mutual funds with the equity category, and the importance of having debt mutual funds in the overall portfolio is often not understood, or worse still, misunderstood. The securities and exchange board of india (mutual funds) regulations, 1996 defines a mutual fund as a 'a fund estab- lished in the form of a trust to raise money through the sale of. India's mutual fund and stock market have witnessed phenomenal growth over the last few yearsaccording to a study, mutual funds would be one of the major instruments of wealth creation and wealth saving in the years to come, giving positive results.
The mutual fund industry in india started in 1963 with the formation of unit trust of india, at the initiative of the government of india and reserve bank the history of mutual funds in india can be broadly divided into four distinct phases. Growth of mutual funds has been gradual and it took really long years to evolve the modern day mutual funds mutual funds emerged for the first time in netherlands in the 18th century then it got introduced to switzerland, then scotland and then to united states in the 19th centurythe very idea of mutual funds came from the urge to deliver a. Association of mutual funds in india has played a significant role in creating a healthy and professional market for mutual funds it has elevated the standard of the mutual fund investment patterns by introducing more beneficiary schemes to attract more investors.
Transfer agent the mutual fund contracts with a transfer agent to issue, redeem and cancel fund shares, handle the distribution of dividend and capital gains to shareholders, and send out trade. The role of mutual funds in promoting savings continues to be insignificant in india despite a long history, assets of mutual funds in india constitute less than 10 per cent of gdp a cross-country comparison suggests that mutual funds are very popular all over the world. The sponsor of a mutual fund is the promoter of the mutual fund the sponsor makes an application for registration of the mutual fund with sebi and provides the capital which is now minimum rs 50 crores for setting up the mutual fund. Fund governance has been found to play a role in fee-setting policies since funds tend to charge lower fees when they have smaller boards and a larger proportion of independent directors (tufano and sevick 1997. Role of mutual funds as financial intermediaries when mutual funds use money from investors to invest in newly issued debt or equity securities, they finance new investment by firms conversely, when they invest in debt or equity securities already held by investors, they are transferring ownership of the securities among investors.
To start a career as mutual fund distributor the minimum requirement is nism series va mutual fund distributors certification and a registration number from the associations of mutual funds in india (amfi. Employee unique identification number (euin) background pursuant to sebi circular dated september 13, 2012, mutual funds were directed to capture the unique identity number (euin) of the employee/ relationship manager/ sales person of the distributor interacting with the investor for the sale of mutual fund products, in addition to the amfi registration number (arn) of the distributor. 51 public sector the table 7 indicates the growth of unit trust of india mutual fund and public sector (other than uti) during the period 2003-2009 it is observed that there is a continuous growth in assets under management by uti mf up to the april, 2008 followed by a marginal decrease in the year 2009. Slow start, rapid growth: story of india's mutual funds industry for decades before that, uti mutual fund, started through legislation pushed by the then minister for economic and defence coordination t t krishnamachari, had had a monopoly. Responsibility of a registrar and transfer agent it is the sole responsibility of an r & t agent to maintain the records of all such transactions carried by them on behalf of the fund house, through various branches of offices set up in various parts of the country.
A typical mutual fund structure in india can be graphically represented as follows: c regulatory regime a mutual fund is a fund established in the form of a trust to raise monies through the sale of. What is the role of sponsors and trustees in a mutual fund distributors and investors often overlook the role of sponsors and trustees while evaluating mutual funds read on to understand how both entities play a crucial role in the functioning of an mf. The main problem is, mutual fund penetration is quite low in india (only 2-3% of the population invests in mutual funds) the direct slice of the pie within that 2-3% is growing fatter steadily with so much information freely available online, this is inevitable. As the link between investors and mutual fund houses and companies which sell other financial products, financial planners and advisors play a very important role.
History and role of sebi in mutual funds in india unit trust of india was the first mutual fund set up in india in the year 1963 in early 1990s, government allowed public sector banks and institutions to set up mutual funds. 8[(q) ―mutual fund‖ means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities including money market instruments or gold or.
History of mutual fund industry in india, the mutual fund industry started with the setting up of the erstwhile unit trust of india in 1963 public sector banks and financial institutions were allowed to establishmutual funds in 1987. A mutual fund custodian refers typically to a custodian bank or trust company (a special type of financial institution regulated like a bank), or similar financial institution responsible for holding and safeguarding the securities owned by a mutual fund. Securities & exchange board of india had issued a set of regulations and code of conduct as sebi(mutual fund) regulations, 1996 on 9th december 1996 for the.