Securities and Exchange Board of
CONTENTS
CHAPTER I: PRELIMINARY
CHAPTER
II: REGISTRATION OF COLLECTIVE INVESTMENT
MANAGEMENT COMPANY
9A. Criteria for fit and proper person
CHAPTER
III: BUSINESS ACTIVITIES AND OBLIGATIONS OF
COLLECTIVE INVESTMENT MANAGEMENT COMPANY
CHAPTER
IV: TRUSTEES AND THEIR OBLIGATIONS
CHAPTER
V: SCHEMES OF COLLECTIVE INVESTMENT MANAGEMENT
COMPANY
CHAPTER
VI: GENERAL OBLIGATIONS
CHAPTER
VII: INSPECTION AND AUDIT
CHAPTER
VIII: PROCEDURE FOR ACTION IN CASE OF DEFAULT
CHAPTER
IX: EXISTING COLLECTIVE INVESTMENT SCHEMES
CHAPTER
X: MISCELLANEOUS
FIRST SCHEDULE: FORMS
FORM A: APPLICATION FOR THE GRANT OF REGISTRATION AS COLLECTIVE INVESTMENT
MANAGEMENT COMPANY
FORM
B: CERTIFICATE OF REGISTRATION
FORM C: TRUSTEESHIP OF
THE COLLECTION INVESTMENT SCHEME
SECOND SCHEDULE: FEES
THIRD SCHEDULE: CODE OF CONDUCT
FOURTH SCHEDULE: CONTENTS OF THE TRUST DEED
FIFTH SCHEDULE: CONTENTS OF THE AGREEMENT FOR
MANAGING SCHEME PROPERTY
SIXTH SCHEDULE: CONTENTS OF THE OFFER DOCUMENT
SEVENTH SCHEDULE: ADVERTISEMENT CODE
EIGHTH SCHEDULE: PROCEDURE FOR CONDUCT OF MEETINGS
NINTH SCHEDULE: ACCOUNTING NORMS, INVESTMENTS AND
EXPENSE CEILING
THE GAZETTE OF
PART-II- SECTION -3- SUB-SECTION (ii)
PUBLISHED BY AUTHORITY
SECURITIES AND EXCHANGE BOARD OF
NOTIFICATION
THE FIFTEENTH DAY OF OCTOBER, 1999
MUMBAI
Securities and Exchange Board of
In exercise of the powers conferred by section 30 read
with section 11 and section 19 of the Securities and Exchange Board of India
Act, 1992 (15 of 1992), the Securities and Exchange Board of India hereby makes
the following regulations, namely :�
CHAPTER
I
PRELIMINARY
Short title and commencement
1. (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.
Definitions
2. (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 collective investment management company or trustee, includes
a person:
��� (i) ��� who, directly
or indirectly, by himself, or in combination with other persons, exercises
control over the Collective Investment Management Company or the trustee, as
the case may be, or
��� (ii)
�� in respect of whom the Collective
Investment Management Company or the trustee, as the case may be directly or
indirectly, by itself, or in combination with other persons, exercises control,
or
��� (iii)
� whose director, officer or employee is a
director, officer or employee of the Collective Investment Management Company
or the trustee, as the case may be;
������� (e)�� �auditor�
means a person qualified to audit the accounts of companies under the Companies
Act, 1956;
������� (f)��� �Board�
means the Securities and Exchange Board of India established under the
provisions of section 3 of the Act;
������� (g)�� �certificate�
means a certificate of registration granted under regulation 10 of these
regulations;
������� (h)�� �Collective
Investment Management Company� means a company incorporated under the Companies
Act, 1956 (1 of 1956) and registered with the Board under these regulations,
whose object is to organise, operate and manage a
collective investment scheme;
������� (i)��� �collective investment scheme� has the
meaning assigned to it by sub-regulation (2) of this regulation;
������� (j)��� �closed-ended
scheme� means any scheme launched by a Collective Investment Management
Company, in which the period of maturity of the scheme is specified and there
is no provision for re-purchase before the expiry of the maturity of the scheme;
������� (k)�� �control�
or �controlling interest� means control exercised or controlling interest held
:
��� (i)���� in case of a
company, by any person or combination of persons who directly or indirectly
own, control or hold shares carrying not less than 10% of the voting rights of
such company; or
��� (ii)��� as between two companies, if the same person
or combination of persons, directly or indirectly, own, control or hold shares
carrying not less than 10% of the voting rights of each of the two companies;
or
��� (iii)�� majority of the directors of any company who
are in a position to exercise control over the Collective Investment Management
Company;
������� (l)��� �credit
rating agency� means a body corporate registered under Securities and Exchange
Board of India (Credit Rating Agencies) Regulations, 1999;
������� (m) �depository�
means a body corporate as defined in the Depositories Act, 1996 (22 of 1996);
������� (n)�� �economic
offence� means an offence to which the Economic Offences (Limitation of
Prosecutions) Act, 1974 (12 of 1974) applies for the time being;
������� (o)�� �form�
means any of the forms specified as such in the First Schedule;
������� (p)�� �fraud�,
has the same meaning as is assigned to it in section 17 of the Indian Contract
Act, 1872 (9 of 1872);
������� (q)�� �inspecting
officer� means any person appointed as such by the Board under Chapter VII of
these regulations;
������� (r)�� �key
personnel� in relation to a company, means the persons who exercise effective
control over its affairs;
������� (s)�� �net
worth� means the aggregate value of the paid-up equity capital and free
reserves (excluding funds created out of revaluation), reduced by the aggregate
value of accumulated losses and deferred expenditure not written off, including
miscellaneous expenses not written off;
������� (t)��� �offer
document� means any document by which applications for subscribing to units of
the scheme are invited from the public;
������� (u)�� �regulation�
means a regulation forming part of these regulations;
������� (v)�� �relative�
means a person who is a relative, as defined in section 6 of the Companies Act,
1956 (1 of 1956);
������� (w)� �registrars
to an issue and share transfer agent� means a person registered as Registrars
to an Issue and Share Transfer Agents under the Securities and Exchange Board
of India (Registrar to an Issue and Share Transfer Agents) Regulations, 1993;
������� (x)�� �schedule�
means any of the schedule appended to these regulations;
������� (y)�� �scheme�
means a collective investment scheme;
������� (z)�� �scheme
property� includes:
��� (i)���� subscription of
moneys or money�s worth (including bank deposits) to the scheme;
��� (ii)��� property acquired, directly or indirectly,
with, or with the proceeds of, subscription of money referred to in item (i) of this Clause; or
��� (iii)�� income arising, directly or indirectly, from
subscription money or property referred to in item (i)
or (ii),
������� (aa) �securities laws� means:
��� (i)���� the Securities
and Exchange Board of
��� (ii)��� the Securities Contracts (Regulation) Act,
1956 (42 of 1956); and
��� (iii)�� the Depositories Act, 1996 (22 of 1996), as
amended from time to time;
(bb) �stock broker�
means a stock broker as defined in Securities and Exchange Board of India
(Stock Brokers and Sub-brokers) Rules, 1992;
(cc) �trustee�
means a person who holds the property of the collective investment scheme in
trust for the benefit of the unit holders, in accordance with these
regulations;
(dd) �unit� includes any instrument issued under a scheme,
by whatever name called, denoting the value of the subscription of a unit
holder; and
(ee) �unit holder� means a person holding a unit in a scheme.
[1][(2) In these
regulations the expression �collective investment scheme� shall have the same
meaning as assigned to it under section 11AA of the Act.]
(3) Words and expressions used and not defined in these
regulations, but defined in the Act shall have the same meanings as are
respectively assigned to them in the Act.
CHAPTER
II
REGISTRATION
OF COLLECTIVE INVESTMENT MANAGEMENT COMPANY
No Person Other than Collective Investment Management Company to Launch
Scheme
3. 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.
Application for grant of certificate.
4. 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.
Application by existing Collective Investment Schemes.
5. (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.
Application fee to accompany the application
6. Every application
for registration under regulation 4 shall be accompanied by a non-refundable
application fee as specified in the Second Schedule.
Application to conform to the requirements
7. 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.
Furnishing information
8. (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.
Conditions for eligibility
9. 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;
��� (c)
�� 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;
��� (d)
�� the applicant is a fit and proper
person for the grant of such certificate;
��� (e)
�� the applicant has adequate
infrastructure to enable it to operate collective investment scheme in
accordance with the provision of these regulations;
��� (f)
��� the directors or key personnel of the
applicant shall consist of persons of honesty and integrity having adequate
professional experience in related field and have not been convicted for an
offence involving moral turpitude or for any economic offence or for the
violation of any securities laws;
��� (g)
�� at least fifty per cent of the
directors of such Collective Investment Management Company shall consist of
persons who are independent and are not directly or indirectly associated with
the persons who have control over the Collective Investment Management Company;
��� (h)
�� no person, directly or indirectly
connected with the applicant has in the past been refused registration by the
Board under the Act.
����������� Explanation : For the purposes of this
clause, the Board shall take into account whether the previous application for
a certificate of any person, directly or indirectly, connected with the
applicant has been rejected by the Board or any disciplinary action has been
taken against such person under the Act or any of the rules or any of the regulations
made under the Act.
��� (i) ��� at least one of
the directors, on the Board of the Collective Investment Management Company,
who is not subject to retirement, is a representative of the trustee;
��� (j)
��� the Collective Investment Management
Company is not a trustee of any collective investment scheme;
��� (k)
�� in case the applicant is an existing
collective investment scheme, it complies with the provisions of Chapter IX of
these regulations.
[2][Criteria for fit and proper person
9A. For the purpose of determining
whether an applicant or the collective investment management company is a fit
and proper person, the Board may take into account the criteria specified in
Schedule II of the Securities and Exchange Board of India (Intermediaries)
Regulations, 2008.]
Grant of Certificate
10. (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.
Terms and conditions to be complied with
11. 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 approval
of the trustee;
��� (d)
�� the Collective Investment Management
Company shall comply with provisions of the Act and these regulations;
��� (e)
�� no change in the controlling interest
of the Collective Investment Management Company shall be made without obtaining
prior approval of the Board, the trustee and the unit holders holding at least
one-half of the nominal value of the unit capital of the scheme;
��� (f)
��� the Collective Investment Management
Company shall take adequate steps to redress the grievances of the investors
within one month from the date of receipt of the complaint from the aggrieved
investor.
Procedure where registration is not granted
12. (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.
CHAPTER III
BUSINESS
ACTIVITIES AND OBLIGATIONS OF COLLECTIVE INVESTMENT MANAGEMENT COMPANY
Restrictions on business activities
13. 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.
Obligations of Collective Investment Management Company
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;
��� (f)
��� be incompetent to enter into any
transaction with or through its associates, or their relatives relating to the
scheme :
����������� Provided
that in case the Collective Investment Management Company enters into any
transactions relating to the scheme with any of its associates, a report to
that effect shall immediately be sent to the trustee and to the Board.
��� (g)
�� appoint registrar and share transfer
agents;
��� (h)
�� abide by the Code of Conduct as
specified in the Third Schedule;
��� (i) ��� give receipts
for all monies received by it and give a report to the Board every month,
particularly of receipts and payments;
��� (j)
��� hold a meeting of the Board of
Directors to consider the affairs of scheme at least twice in every three
months;
��� (k)
�� ensure that its officers or employees
do not make improper use of their position or information to gain, directly or
indirectly, an advantage for themselves or for any other person or to cause
detriment to the scheme;
��� (l)
��� obtain adequate insurance against the
property of the scheme;
��� (m)
comply with such guidelines, directives,
circulars and instructions as may be issued by the Board from time to time, on
the subject of collective investment schemes.
Submission of information and documents
15. (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 along
with 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 yearly appraisal report to the unit holders within two months
from the closure of financial year.
(4) The Collective Investment Management Company shall
furnish to the Board and the trustee such information and documents to the
Board and the trustee as may be required by them concerning the affairs of the
scheme.
CHAPTER IV
TRUSTEES AND THEIR
OBLIGATIONS
Trust Deed to be registered under the Registration Act
16. (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.
Appointment of trustees
(2) A Collective Investment Management Company shall
appoint a trustee who shall hold the assets of the scheme for the benefit of
unit holders.
Contents of trust deed
17. (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.
Eligibility for appointment as trustee
18. (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).
Appointment of trustee not found guilty
19. 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.
Agreement with collective investment management company
20. (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.
Rights and obligations of the trustee
21. (1) The trustee shall
have a right:�
��� (a) �� to
obtain from the Collective Investment Management Company such information as is
considered necessary by the trustee.
��� (b)
�� to inspect the books of account 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;
��� (d)
�� appointed a compliance officer to
comply with the provisions of the Act and these regulations and to redress
investor grievances;
��� (e)
�� appointed registrars to an issue and
share transfer agent;
��� (f)
��� prepared a compliance manual and
designed internal control mechanisms including internal audit systems;
��� (g)
�� taken adequate insurance for the assets
of the scheme;
��� (h)
�� not given any undue or unfair advantage
to any associates of the company or dealt with any of the associates in any
manner detrimental to the interest of the unit holders;
��� (i) ��� operated the
scheme in accordance with the provisions of the trust deed, these regulations
and the offer document of the scheme(s);
��� (j)
��� undertaken the activity of managing
schemes only;
��� (k)
�� taken adequate steps to ensure that the
interest of investors of one scheme are not compromised with the object of
promoting the interest of investors of any other scheme;
��� (l)
��� minimum networth
on a continuous basis and shall inform the Board immediately of any shortfall;
��� (m)
been diligent in empanelling the
marketing agents and in monitoring their activities.
(3) Where the trustee has reason to believe that the
conduct of business of the scheme is not in accordance with these regulations,
trust deed and the offer document of the scheme, the trustee shall forthwith
take such remedial steps as are necessary and shall immediately inform the
Board of the action taken.
(4) The trustee shall be accountable for, and be the
custodian of, the funds and property of the respective schemes and shall hold
the same in trust for the benefit of the unit holders in accordance with these
regulations and the provisions of trust deed.
(5) The trustee shall be responsible for the
calculation of any income due to be paid to the scheme and also for any income
received in the scheme to the unit holders.
(6) The trustee shall convene a meeting of the unit
holders�
��� (a)
�� whenever required to do so by the Board
in the interest of the unit holders; or
��� (b)
�� whenever required to do so on the
requisition made by unit holders holding at least one-tenth of nominal value of
the unit capital of any scheme; or
��� (c)
�� when any change in the fundamental
attributes of any scheme which affects the interest of the unit holders is
proposed to be carried out .
��� Provided
that no such change shall be carried out unless the consent of unit holders
holding at least three-fourths of nominal value of the unit capital of the
scheme is obtained.
��� Explanation
:- For the purposes of this clause �fundamental attributes� means the
investment objective and terms of a scheme.
(7) The trustee shall review :
��� (a)
�� on a quarterly basis (i.e., by the end
of March, June, September and December) every year all activities carried out
by the Collective Investment Management Company;
��� (b)
�� periodically all service contracts
relating to registrars to an issue and share transfer agents and satisfy itself
that such contracts are fair and reasonable in the interest of the unit
holders;
��� (c)
�� investor complaints received and the redressal of the same by the Collective Investment
Management Company.
(8) (i) The trustee shall ensure that:�
��� (a)
�� net worth of Collective Investment Management
Company is not deployed in a manner which is detrimental to interest of unit
holders;
��� (b)
�� property of each scheme is clearly
identifiable as scheme property and held separately from property of the
Collective Investment Management Company and property of any other scheme;
��� (c)
�� clearances or no objection certificate
is obtained, in respect of transactions relating to property of the scheme from
such authority as is competent to grant such clearance or no objection
certificate.
(ii)
The trustee shall abide by the Code of Conduct as specified in the Third
Schedule.
(9) The trustee shall furnish to the Board on a
quarterly basis (i.e., by end of March, June, September and December),
every year�
��� (a)
�� a report on the activities of the
scheme;
��� (b)
�� a certificate stating that the trustee
has satisfied himself that affairs of the Collective Investment Management
Company and of the various schemes are conducted in accordance with these
regulations and investment objective of each scheme.
(10) The trustee shall cause:�
��� (a)
�� the profit and loss accounts and
balance sheet of the schemes to be audited at the end of each financial year by
an auditor empanelled with the Board.
��� (b)
�� each scheme to be appraised at the end
of each financial year by an appraising agency.
��� (c)
�� scheme rated by a credit rating agency.
(11) A meeting of the trustees to discuss the affairs
of the scheme shall be held at least twice in every three months in a financial
year.
(12) The trustee shall report to the Board any breach
of these regulations and has had, or is likely to have, a materially adverse
effect on the interests of unit holders as soon as they become aware of the
breach.
(13) The trustee shall ensure that�
��� (a)
�� the fees and expenses of the scheme are
within the limits as specified in Part I of the Ninth Schedule;
��� (b)
�� accounts of the schemes are drawn up in
accordance with the accounting norms as specified in Part II of the Ninth
Schedule.
��� (c)
�� accounts of the scheme comply with the
format of the balance sheet and the profit and loss account as specified in
Part III of the Ninth Schedule.
Termination of trusteeship
22. (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 (Debenture 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 hearing before
action is taken under this clause;
��� (e)
�� if the trustee serves on the Collective
Investment Management Company a notice of not less than three months expressing
its intention not to continue as trustee.
(2) On termination of the trusteeship under
sub-regulation (1), another trustee, eligible to be appointed under regulation
18, shall be appointed by the Collective Investment Management Company.
(3) The appointment of the new trustee under sub-regulation
(2), shall be completed within three months from the date the previous
trusteeship came to an end.
(4) The Board may notwithstanding anything contained in
regulation 18 appoint any person as a trustee if the Collective Investment
Management Company fails to appoint a trustee under sub-regulations (2) and
(3).
(5) The trustee appointed under sub-regulations (3) and
(4) shall stand substituted as a trustee in all the documents to which the
trustee so removed was a party.
(6) The person appointed by the Board shall apply to
the Court for an order directing the Collective Investment Management Company
to wind up the scheme.
(7) A trust deed in the form as specified under
regulation 16 shall be executed by the Collective Investment Management Company
in favour of the trustee so appointed and from the
date of such appointment, trustees shall be subject to all the rights and
duties as specified in the regulations.
(8) The trustee so removed shall from such date be
discharged from complying with the obligations under the trust deed but shall
remain liable for any action taken by them before such removal.
Termination of the Agreement with the Collective
Investment Management Company
23. (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 Collective
Investment Management Company.
(2) Upon termination of agreement under sub-regulation
(1), another Collective Investment Management Company, registered with the
Board, shall be appointed by the trustee within three months from the date of
such termination.
(3) The Collective Investment Management Company so
removed shall continue to act as such at the discretion of trustee or the
trustee itself may act as Collective Investment Management Company till such
time as new Collective Investment Management Company is appointed.
(4) The Collective Investment Management Company
appointed under sub-regulation (2) shall stand substituted as a party in all
the documents to which the Collective Investment Management Company so removed
was a party.
(5) The Collective Investment Management Company so
removed shall continue to be liable for all acts of omission and commissions
notwithstanding such termination.
(6) If, none of the Collective Investment Management
Company, registered under these regulations, consent to be appointed as
Collective Investment Management Company within a further period of three
months, then the trustee may wind up the scheme.
(7) An agreement for managing scheme property shall be
executed in favour of the new Collective Investment
Management Company subject to all the rights and duties as specified in the
regulations.
CHAPTER V
SCHEMES OF
COLLECTIVE INVESTMENT MANAGEMENT COMPANY
Procedure for launching of schemes
24. (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.
Close ended scheme and Scheme duration
(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.
Insurance
(5) Collective Investment Management Company shall
obtain adequate insurance policy for protection of the scheme property.
No guaranteed returns
25. 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.
Disclosures in the offer document
26. (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 within 21 days from the date of filing, the Collective
Investment Management Company may issue the offer document to public.
Advertisement material
27. (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.
Appraising Agency
28. 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.
Misleading Statements
29. (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.
Offer period
�
30. No scheme shall be
open for subscription for more than 90 days.
Allotment of Units and refunds of moneys
31. (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 applicants.
(4) In the event of failure to refund the amounts
within the period specified in sub-regulation (3), the Collective Investment
Management Company shall pay interest to the applicants at a rate of fifteen
per cent per annum on the expiry of six weeks from the date of closure of the
subscription list.
Unit certificates
32. 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.
Transfer of units
33. (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.
Money to be kept in separate account and utilisation of money
34. (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.
(3) The moneys credited to the account of the scheme
shall be utilised for the purposes of the scheme and
as specified in the offer document.
(4) Any unutilised amount
lying in the account of the scheme shall be invested in the manner as disclosed
in the offer document.
Investments and segregation of funds
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.
Listing of schemes
36. 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.
Winding up of scheme
37. (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
��� (d)
�� if in the opinion of the Collective
Investment Management Company, the purpose of the scheme cannot be accomplished
and it obtains the approval of the trustees and also of the unit holders of the
scheme holding at least three-fourth of the nominal value of the unit capital
of the scheme with a resolution that the scheme be wound up and the approval of
the Board is obtained.
(3) Where a scheme is to be wound up under
sub-regulation (1) or sub-regulation (2), the trustee shall give notice
disclosing the circumstances leading to the winding up of the scheme in a daily
newspaper having nationwide circulation and in the newspaper published in the
language of the region where the Collective Investment Management Company is
registered.
(4)(a) The trustee shall dispose of the assets
of the scheme concerned in the best interest of the unit holders of that
scheme.
(b) The proceeds of sale realised
under clause (a), shall be first utilised
towards the discharge of such liabilities as are due and payable under the
scheme and after making appropriate provision for meeting the expenses
connected with such winding up, the balance shall be paid to the unit holders
in proportion to their unit holding.
(5) On the completion of the winding up, the trustee
shall forward to the Board and the unit holders :
��� (a)
�� a report on the steps taken for realisation of assets of the scheme, expenses for winding
up and net assets available for distribution to the unit holders, and
��� (b)
�� a certificate from the auditors of the
scheme to the effect that all the assets of the scheme are realised
and the details of the distribution of the proceeds.
(6) The unclaimed money if any at the time of winding
up shall be kept separately in a bank account by the trustee for a period of
three years for the purpose of meeting investors� claims and thereafter shall
be transferred to investor protection fund, as may be specified by the Board.
Effect of commencement of winding up proceedings
38. 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.
�
Cessation of the scheme
�
39. 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.
CHAPTER VI
GENERAL
OBLIGATIONS
To maintain proper books of account and records, etc.
40. (1) Every
Collective Investment Management Company shall�
��� (a)
�� keep and maintain proper books of
account, 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 account, 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 account, records, computer data and
documents.
Financial year
41. The financial year
for all the schemes shall end as on March 31 of each year.
Despatch of warrants and
proceeds
42. 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.
Statement of Accounts and Annual Report
43. (1) The Collective
Investment Management Company shall:
��� (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.
Auditor�s Report
44. (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 and the revenue
account give a fair and true view of the scheme, state of affairs and surplus
or deficit in the scheme for the accounting period to which the Balance Sheet
or, as the case may be the Revenue Account relates;
��� (iii)
����� the statement of account has been
prepared in accordance with accounting policies and standards as specified in
Part II of the Ninth Schedule;
��� (iv)
����� any other matter which in the
opinion of the auditor is vital and has a bearing on the schemes.
Functions of auditors of scheme
45. (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 to 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.
Removal or Resignation of auditors
46. (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.
Publication of Annual Report and summary thereof
47. (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.
Periodic and continual disclosures
48. (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 account 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.
Quarterly disclosures
�
49. 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 nationwide 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.
Disclosures to the investors
50. 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.
Calling of meeting of unit holders, transfer and
transmission of units
51. 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.
CHAPTER VII
INSPECTION AND
AUDIT
Board�s right to inspect and investigate
52. (1) The Board may
appoint one or more persons as Inspecting Officer to undertake the inspection
of the books of account, 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 account 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;
��� (d)
�� to investigate into the complaints
received from the investors or any other person on any matter having a bearing
on the activities of the trustee and Collective Investment Management Company.
Notice before inspection and investigation
53. (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.
Obligations during inspection and investigation
54. (1) It shall be
the duty of the trustee or Collective Investment Management Company whose
affairs are being 32 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 such other person and also provide copies of documents or
other materials which in the opinion of the inspecting officer are relevant for
the purpose of the inspection.
Submission of report to the Board
55. 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.
[3][Action on
inspection or investigation report
56. The Board or the
Chairman shall after consideration of inspection or investi�gation report take
such action as the Board or Chairman may deem fit and appropriate including
action under [4][Chapter V of the Securities and Exchange
Board of India (Intermediaries) Regulations, 2008].]
Appointment of Auditor and recovery of expenses
57. (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 account 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.
Payment of inspection fees to the Board
(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 account, records and documents of the
trustee or Collective Investment Management Company.
CHAPTER VIII
PROCEDURE FOR
ACTION IN CASE OF DEFAULT
58. [5][***]
[6][Liability for
action in case of default
59. 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 provision of the
Code of Conduct specified in the Third Schedule;
��� (g)��� fails to pay the fees specified in the
Second Schedule;
��� (h)��� commits a breach of the conditions of
registration; or
��� (i)���� fails to make
an application for listing or fails to list units of a Scheme in a recognized
stock exchange,
��� shall
be dealt with in the manner provided in [7][Chapter
V of the Securities and Exchange Board of India (Intermediaries) Regulations,
2008].]
60. to 64. [8][***]
Directions by the Board
65. 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 money or the assets to the concerned investors along with the
requisite interest or otherwise, collected under the scheme;
��� (e)
�� prohibiting the person concerned from
operating in the capital market or from accessing the capital market for a
specified period.
Action against intermediaries
66. 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.
Appeal to the Central Government
[9][67. Any person aggrieved
by an order of the Board made, on and after the commencement of the Securities
Laws (Second Amendment) Act, 1999, (i.e., after 16th December, 1999),
under these regulations may prefer an appeal to a Securities Appellate Tribunal
having jurisdiction in the matter.]
CHAPTER IX
EXISTING
COLLECTIVE INVESTMENT SCHEMES
Existing schemes to obtain provisional registration
�
68. (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.
(2) An existing collective investment scheme shall make
an application to the Board in the manner specified in regulation 5.
(3) The application made under sub-regulation (2) shall
be dealt with in any of the following manner:
��� (a)
�� by grant of provisional registration by
the Board under sub-regulation (1) of regulation 71;
��� (b)
�� by grant of a certificate of
registration by the Board under regulation 10;
��� (c)
�� by rejection of the application for
registration by the Board under regulation 12.
No scheme to be launched until grant of registration
69. 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
70. (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 at least 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.
(2) The Board for the purposes of grant of provisional
registration may, inter alia, inspect the
schemes, books of account, records and documents of the applicant.
(3) The Board shall recover from the applicant such
expenses including fees paid to the auditor, appraising agency as may be
incurred by it for the purposes of inspecting the schemes, books of account,
records and documents of the applicant.
(4) The Board on being satisfied that the requirements
specified in sub-regulation (1) are not fulfilled may reject the application
and the applicant thereupon shall wind up its existing scheme(s) in the manner
specified in regulation 73.
Grant of provisional registration
71. (1) 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 [10][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 [11][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 [12][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 Chapter IV of these regulations
within a period of [13][two]
year from the date of grant of provisional registration;
��� (e)
�� the applicant shall comply with
accounting and valuation norms in respect of schemes floated before the
commencement of these regulations as specified in Part II of the Ninth Schedule
within a period of [14][two]
year from the date of provisional registration;
��� (f)
��� the applicant shall meet the minimum
net worth of Rupees one crore within one year from
the date of grant of provisional registration which shall be increased by
Rupees one crore each within two years, three years,
four years and five years from the date of grant of provisional registration;
��� (g)
�� the applicant shall not dispose of the
scheme property except for meeting obligations arising under the offer document
of the scheme;
��� (h)
�� the applicant shall comply with the
conditions specified in regulation 11;
��� (i) ��� such other
conditions which the Board may impose.
(2) The applicant shall give a written undertaking to
the Board to comply with the conditions specified in sub-regulation (1).
(3) The applicant who has been considered eligible for
the grant of provisional registration by the Board shall pay provisional
registration fee as per the Second Schedule.
(4) An applicant who after grant of provisional
registration fails to comply with the conditions as specified in sub-regulation
(1) and regulation 9 shall not be considered eligible for the grant of certificate
of registration under regulation 10 and shall wind up the scheme in the manner
specified in regulation 73.
Registration to existing scheme
72. (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.
Manner of repayment and winding up
73. (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) The information memorandum referred to in
sub-regulation (2) shall be dated and signed by all the directors of the
scheme.
(4) The Board may specify such other disclosures to be
made in the information memorandum, as it deems fit.
(5) The information memorandum shall be sent to the
investors within one week from the date of the information memorandum.
(6) The information memorandum shall explicitly state
that investors desirous of continuing with the scheme shall have to give a
positive consent within one month from the date of the information memorandum
to continue with the scheme.
(7) The investors who give positive consent under
sub-regulation (6), shall continue with the scheme at their risk and
responsibility :
Provided that if the positive consent to continue
with the scheme, is received from only twenty-five per cent or less of the
total number of existing investors, the scheme shall be wound up.
(8) The payment to the investors, shall be made within
three months of the date of the information memorandum.
(9) On completion of the winding up, the existing
collective investment scheme shall file with the Board such reports, as may be
specified by the Board.
Existing scheme not desirous of obtaining registration
to repay
74. 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 73.
CHAPTER X
MISCELLANEOUS
Power of the Board to issue clarifications
75. 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.
FIRST SCHEDULE
FORMS
FORM A
SECURITIES AND EXCHANGE BOARD OF
[Regulations 4, 5(2)]
APPLICATION FOR THE GRANT OF REGISTRATION
AS COLLECTIVE INVESTMENT MANAGEMENT COMPANY
�� 1. NAME
OF THE APPLICANT :
�� 2. CONTACT
PERSON :
�� 3. NAME
OF THE COMPLIANCE OFFICER :
����� TELEPHONE NO. :
|
FAX NO. : |
�� 4. ADDRESS
OF THE REGISTERED OFFICE OF THE APPLICANT :
������� PIN CODE :
����� TELEPHONE NO. :
|
FAX NO. : |
�� 5. ADDRESS
OF THE APPLICANT FOR CORRESPONDENCE :
������� PIN CODE :
����� TELEPHONE NO. :
|
FAX NO. : |
�� 6. Address of branch offices (in
������� (A)
������� (B)
������� (C)
�� 7. Whether any other application under securities
and exchange board of
�� 8. DATE
AND PLACE OF INCORPORATION OF THE COLLECTIVE INVESTMENT MANAGEMENT COMPANY :
������� (Enclose a copy of certificate of
incorporation)
�� 9. OBJECTS
OF THE COLLECTIVE INVESTMENT MANAGEMENT COMPANY :
������� (Enclose copy of the Memorandum and
Articles of Association)
10.
11. ANCILLARY
OBJECTS :
������� (the Memorandum and Articles of Association
should have necessary clause in respect of collective investment scheme and
amendments, if any, shall have to be incorporated in the existing Memorandum
and Articles of Association)
12. CAPITAL
STRUCTURE AND SHAREHOLDING PATTERN :
������� (give list of major shareholders holding
5% or more voting rights and percentage of their share holdings, as of the
latest date)
13. NET
WORTH OF THE COMPANY :
������� (as of the latest date)
14. PRESENT
LINE(S) OF BUSINESS ACTIVITIES:
������� (History, major achievements and present
activity)
15. FINANCIAL
INFORMATION :
������� (Enclose Balance Sheet and Profit and
Loss account for the immediately preceding 3 years)
16. ACCOUNTING
POLICIES:
������� (Furnish description of significant
accounting policies)
17. NAMES
AND ACTIVITIES OF ASSOCIATE COMPANIES/CONCERNS CARRYING ON ACTIVITIES RELATED
TO THE SECURITIES MARKET AND GRANTED REGISTRATION BY SEBI :
18. MANAGEMENT
OF THE COLLECTIVE INVESTMENT MANAGEMENT COMPANY:
19. BOARD
OF DIRECTORS :
������� (Indicate name, qualifications, background,
experience, whether directorship is on whole-time/part-time basis, other
directorships, of the Directors. Whether any of the Directors is in full
employment elsewhere; give details thereof. If any of the Directors is a member
of a professional body i.e., the ICAI or ICSI, to furnish permission of
the professional body for acting as director of the applicant )
20. KEY
MANAGEMENT PERSONNEL :
������� (Furnish the names, qualifications,
experience of the key management personnel indicating their experience. Also,
submit proof of acceptance of appointment letter, latest salary slips)
21. OTHER
EMPLOYEES :
������� (Furnish the names, qualifications,
experience of the other employees)
22. DETAILS
OF INFRASTRUCTURAL FACILITIES :
23. OFFICE
SPACE :
������� (Mention extent of area available at the
place where the main activity would be carried out; detail of office space
available at all the locations; certified copies of relevant sale deed/lease
deed/rental agreement etc. in respect of each of the premises to be enclosed.)
24. OFFICE
EQUIPMENT :
������� (mention the details of electronic
office equipment, computers, fax, telephones etc; submit proof of purchase of
the above equipments.)
25. INVOLVEMENT
IN CASES :
� (a) Court
cases/litigations in which the applicant may have been involved in the last 3
years.
� (b) Involvement
in any offence relating to moral turpitude/economic offences of the directors,
employees of the applicant in the last 3 years.
26. AUDITORS
27. OTHER
INFORMATION :
������� Any other information considered relevant
to the nature of services rendered by the applicant.
������� Names and addresses of the auditors of
the applicant :
28. DOCUMENTS
:
������� Submit copies of :
� (a) Draft
Trust Deed; and
� (b) Draft
Investment Management Agreement
������� INSTRUCTION FOR FILLING UP THE FORM :�
� (a) Applicants
must submit a completed application form together with appropriate supporting
documents to the Board.
� (b) It
is important that this application form should be filled in accordance with the
regulations.
� (c) An
application which is not complete is liable to be rejected.
� (d) Answers
must be typed and legible.
� (e) Information
which needs to be supplied in more details may be given on separate sheets
which should be attached to the application form.
�� (f) The
application must be signed by the competent person having authority to do so
and all signatures must be in original.
FORM B
SECURITIES AND EXCHANGE BOARD OF
[Regulation 10]
CERTIFICATE OF REGISTRATION
In exercise of the powers conferred by section 30 of
the Securities and Exchange Board of India Act, 1992 (15 of 1992), read with
the Securities and Exchange Board of India (Collective Investment Scheme)
Regulations, 1999 made thereunder the Board hereby
grants a certificate of registration to
.................................................................. as an
Collective Investment Management Company.
Registration Code for the Collective Investment
Management Company is CIMC/CIS/ / /
Date
By order
Sd/-
For and on behalf
Securities
and Exchange Board of
FORM C
SECURITIES AND EXCHANGE BOARD OF
[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
������� Key Personnel
������� Other Employees
�� (f)
Details of Infrastructure facilities
������� Office Space
������� Office Equipment
� (g)
Court cases/litigations in which the
trustee may have been involved in the last three years and whether the case is
pending or has been adjudicated.
� (h)
Any penalty imposed by SEBI or by other
regulatory bodies during the last three years.
�� (i) Any other
information considered relevant to the nature of services rendered by the
trustee.
(2) INSTRUCTION FOR FILLING UP THE FORM
(See Form A)
SECOND SCHEDULE
Securities and Exchange Board of
[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: [see para 2 below] |
Rupees Five Lacs |
� (c)� Registration fees payable by the applicant
for grant of registration as collective investment management company : |
Rupees Ten Lacs |
� (d)� Filing fees for offer document : |
Rupees Twenty-Five thousand |
�� 2.� The applicant who has paid provisional
registration fee of Rs. 5 lacs under sub-paragraph (b) of paragraph 1, shall pay
remaining registration fee of Rs. 5 lacs at the time
of grant of registration.
�� 3.� The fees referred to in paragraphs 1 and 2
above, shall be paid by means of a bank draft in favour
of �Securities and Exchange Board of India� at Mumbai or at the regional
offices where the application for registration or draft offer document is
submitted.
THIRD SCHEDULE
Securities and Exchange Board of
[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 unit holders.
2. Dissemination of information
� (a)� the
trustee and the Collective Investment Management Company shall ensure the
timely dissemination to all unit holders, of adequate accurate and explicit
information about the investment policies, investment objectives, financial
position and general affairs of the scheme;
� (b)� all
such information shall be fairly presented in simple language.
3. Conflict of interest
The trustee and the Collective Investment Management
Company shall in managing the affairs of the schemes avoid conflicts of
interest and treat the interests of all unit holders paramount in all matters.
4. Segregation
The trustee and the Collective Investment Management
Company shall ensure scheme-wise segregation of funds and assets as created.
5. Integrity,
investments as per objects, etc.
The trustee and the Collective Investment Management
Agency shall
� (a)
carry on the business and make
investments in accordance with the investment objectives stated in the offer
documents and take investment decisions solely in the interests of unit
holders;
� (b)
not use any unethical means for marketing
their schemes or for inducing investors to bring the same;
� (c)
carry on all their activities in the
interests of unit holders and with strict regard to integrity and honesty.
FOURTH SCHEDULE
Securities and Exchange Board of
[Regulation 17(1)]
Contents of the
trust deed
1. 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,
� (c)
the responsibilities, obligations and
rights of the Collective Investment Management Company,
� (d)
the policies for issue, pricing of units
and expenses of the scheme, including payment of fees and distribution of
income and gains and accounting,
� (e)
the policies for disclosures of the
investors of various schemes objectives and investment objectives in offer
documents and advertisements and annual and half-yearly reporting requirements,
�� (f)
provisions to ensure that the auditor for
the scheme shall be different from the Auditor of the Collective Investment
Management Company. Further, it shall contain conditions of appointment,
retirement, removal and replacement of auditor of the scheme,
� (g)
broad policies regarding allocation of
expenditure to capital or income,
� (h)
provisions to explicitly forbid the
acquisition of any asset out of the trust property which involves the
assumption of any liability which is unlimited or shall not result in
encumbrance of the trust property in any way,
�� (i) trusteeship fee,
if any, payable to the trustee,
�� (j)
provisions to the effect that no
amendment to the Trust Deed shall be carried out without the prior approval of
the Board and unit holders,
� (k)
provisions to ensure that removal of the
trustee in all cases shall require the prior approval of the Board and the
provisions regarding appointment of new trustee and their removal be specified,
�� (l)
procedure for seeking approval of the
unit holders,
(m)
provisions for redressal
of grievances of the investors and time within which such complaints shall be
redressed,
� (n)
the circumstances under which the assets
may be disposed of with the approval of the trustee,
� (o)
provisions regarding transfer of units,
meeting of unit holders and maintenance of upto date
register of unit holders,
� (p)
the time within which the unit
certificates shall be issued after allotment and the time within which transfer
of units shall be completed,
� (q)
provisions to ensure that any document
required to be lodged with the Board shall be signed by at least two Directors
of the Collective Investment Management Company with at least one of them being
an independent director,
� (r)
provisions to ensure the public
availability of the trust deed for inspection of unit holders and investors,
� (s)
provisions to ensure that unit holders
shall have beneficial interest in the trust property to the extent of
individual holding in respective schemes only.
2. Trustee�s duties regarding information
properly, etc.
The Trust Deed shall lay down that the trustee shall:
� (a)
obtain necessary information and a
quarterly report from the Collective Investment Management Company,
� (b)
make spot checks on the Collective
Investment Management Company regarding pricing of units and payment into and
out of the scheme and proper accounting of the income of the scheme and
charging of expenses and distribution as permitted,
� (c)
maintain an arms� length relationship
with other companies, or institutions or financial intermediaries or any body
corporate with which it may be associated,
� (d)
take into their custody, or under their
control all the property of the schemes and hold it in trust for the unit
holders,
� (e)
act in the interest of the unit holders,
�� (f)
provide or cause to be provide
information to unit holders and Board as may be specified by the Board,
� (g)
enter into an agreement for managing the
scheme property with the Collective Investment Management Company for this
purpose, and shall enclose the same with the Trust Deed,
� (h)
supervise the collection of any income
due to be paid to the scheme and for claiming any repayment of tax and holding
any income received in trust for the holders in accordance with the Trust Deed,
Offer document and regulations,
�� (i) take reasonable
care to ensure that the funds under the schemes floated by and managed by the
Collective Investment Management Company are in accordance with the Trust Deed,
Offer document and regulations,
�� (j)
have to remove the Collective Investment
Management Company under the specific events only with the approval of Board in
accordance with the regulations,
� (k)
be responsible for the supervision of its
activities of the Collective Investment Management Company in relation to the
scheme and shall also act as a Custodian of the assets of the scheme.
3. Obligations of the
Company
The Trust Deed shall lay down that Collective
Investment Management Company shall:
� (a)
float schemes for the scheme after
approval by the trustee, and manage the funds mobilised
under various schemes, in accordance with the provisions of the Trust Deed,
Offer document and regulations,
� (b)
not invest the corpus of the scheme in
other scheme,
� (c)
not without the approval of the trustee
publish or cause to be published any advertisement containing any invitation to
buy units, or any statement with respect to the sale price of the units or the
return expected from the scheme,
� (d)
use its best endeavours
to carry on and conduct its business in a proper and efficient manner and to
ensure that the scheme to which the deed relates is carried on and conducted in
a proper and efficient manner,
� (e)
make available to the trustee or to the
auditors for inspection all the books of the scheme,
�� (f)
furnish to the trustee or to the auditors
such oral or written information as the trustee or the auditor requires with
respect to all matter relating to the scheme or otherwise relating to the
affairs of the scheme,
� (g)
not exercise the right to vote in respect
of any units relating to the scheme held by the Collective Investment Management
Company.
FIFTH SCHEDULE
Securities and Exchange Board of
[Regulation 20(2)]
Contents of the
agreement for managing scheme property
The Investment Management Agreement shall contain the
following clauses namely:�
Obligations of the Collective Investment Management
Company:
1. 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 with the
provisions of the Trust Deed, Offer document and regulations;
� (b)
shall invest the funds raised under
various schemes in accordance with the provisions of the Trust Deed, Offer
document and the regulations;
� (c)
shall not acquire any assets out of the
scheme property which involves the assumption of any liability which is
unlimited or which may result in encumbrance of the scheme property in any way;
� (d)
shall not give or guarantee loans or take
up any activity in contravention of the regulations;
� (e)
shall ensure that no application form, or
sales literature or other printed matter issued to prospective investors, or
advertisement, or report and/or announcement addressed to the general body of
unit holders, or to the public, or to the press or other communications media,
is issued or published without the trustee�s prior approval in writing, and
contains any statement or matter extraneous to the Trust Deed or Offer Document
scheme particulars approved by the trustee and Board;
�� (f)
shall submit quarterly reports on the
functioning of the schemes to the trustee or at such intervals as may be
required by the trustee or Board.
2. The
trustee :
� (a)
shall have the right to obtain from the
Collective Investment Management Company all information concerning the
operations of the various schemes managed by the Collective Investment
Management Company at such intervals and in such a manner as required by the
trustee to ensure that the Collective Investment Management Company is
complying with the provisions of the Trust Deed, Offer document and
regulations;
� (b)
shall have the power to remove the
Collective Investment Management Company under the specific events only with
the approval of Board in accordance with the regulations.
3. Meeting
the losses
No loss or damage or expenses incurred by the
Collective Investment Management Company or its officers or any person
delegated by the Collective Investment Management Company, shall be met out of
the trust property.
SIXTH SCHEDULE
Securities and Exchange Board of
[Regulation 26(2)]
Contents of the
offer document
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 filed with
the Board shall contain the following details only:�
The
name of the scheme, name and address of the registered office of the Collective
Investment Management Company and trustee along with their telephone number and
fax number.
(ii)
The nature, number, price and amount of the units offered.
(iii)
The following clause in respect of general risk should be
incorporated:
�Investment
in units involve a degree of risk and investors should not invest any funds in
this offer unless they can afford to take the risk of losing their investment.
Investors are advised to read the risk factors carefully before taking an
investment decision in this offering. For taking an investment decision,
investors must rely on their own examination of the scheme and the offer
including the risks involved. The units have not been recommended or approved
by Securities and Exchange Board of India (SEBI) nor does SEBI guarantee the
accuracy or adequacy of this document.�
Specific
attention of investors shall be invited to the summarised
and detailed statement of Risk Factors by indicating their page number(s) in
the �General Risks�.
(iv)
Collective Investment Management Company�s Absolute
Responsibility clause to be incorporated as under:
�The
Collective Investment Management Company, having made all reasonable inquiries,
accepts responsibility for and confirms that this offer document contains all
information with regard to the scheme and that the information contained in the
offer document is true and correct in all material aspects and is not
misleading in any material respect, that the opinions and intentions expressed
herein are honestly held and that there are no other facts, the omission of
which make this document as a whole or any of such information or the expression
of any such opinions or intentions misleading in any material respect.�
(v)
The name and address of the Registrar to the issue along
with the telephone number and fax number.
(vi)
The name and address of the auditor of the scheme.
(vii)
Opening, Closing and Earliest closing date (if any) for the
offer.
(viii)
Credit Rating - Name of the Credit Rating Agency, the rating
given, the tenure of the rating.
(ix)
Name of the Compliance Officer.
(x)
Name of the appraising agency - A brief appraisal report.
(xi)
The front cover page shall be white. No patterns or pictures
shall be printed on this page.
(xii)
The cover page paper shall be of adequate thickness
(preferably minimum 100 gcm quality).
1.2 Front Inside Cover Page
Index shall appear on the Front Inside Cover Page.
1.3 Inner Cover Pages
The other risk factors shall be printed in clear
readable font (preferably of minimum point 10 size) starting on the first inner
cover page to be numbered page i (and, if need be,
shall continue on subsequent pages ii, iii, etc. as distinct from the page
number of the offer document proper which would run as 1, 2, 3, etc. ) in
addition to appearing in the offer document.
1.4 Back cover Pages Back
Inside Cover Page and Back Outside Cover Page shall be
in white and blank. Any �notes� required to be given prominence shall appear
immediately after the Risk Factors wherever they appear.
2. Risk Factors
The Collective Investment Management Company shall
classify the risk factors as those which are specific and internal to the
scheme and those which are external and beyond the control of the Collective
Investment Management Company. Collective Investment Management Company�s
perception of the internal and external risk factors shall be given immediately
after each of the risk factors and not as a separate heading under management
perception.
3. Disclaimer Clause
The offer document shall contain the following
disclaimer clause in capital letters and bold.
�It is to be
distinctly understood that submission of offer document to SEBI should not in
any way be deemed or construed that the same has been cleared or approved by
SEBI. SEBI does not take any responsibility either for the financial soundness
of any scheme for which the issue is proposed to be made or for the correctness
of the statements made or opinions expressed in the offer document. Collective
Investment Management Company, ............................ has certified that
the disclosures made in the offer document are generally adequate and are in
conformity with SEBI (Collective Investment Scheme) Regulations, 1999 in force
for the time being. This requirement is to facilitate unit holders to take an
informed decision for making investment in the proposed issue.
It should also be clearly understood that the
Collective Investment Management Company is primarily responsible for the
correctness, adequacy and disclosure of all relevant information in the offer
document.
WE THE COLLECTIVE INVESTMENT MANAGEMENT COMPANY CONFIRM
that:
�the offer
document forwarded to SEBI is in conformity with the documents, materials and paper
relevant to the issue; all the legal requirements connected with the said
issue, as also the guidelines, instructions, etc. issued by SEBI, the
Government and any other competent authority in this behalf have been duly
complied with; and the disclosures made in the offer document are true, fair
and adequate to enable the investors to make a well informed decision as to the
investment in the proposed scheme.
We confirm that beside ourselves, all the
intermediaries named in the prospectus are registered with SEBI and till date
such registration is valid.
4. Undertaking from the
Collective Investment Management Company
The following undertaking by the Collective Investment
Management Company shall be incorporated in the offer document:
�� (i) that the complaints
received in respect of the issue of units of the scheme would be attended to
expeditiously and satisfactorily,
� (ii)
that the funds required for despatch of refund orders/allotment letters/certificates by
registered post shall be made available to the Registrar to the Issue by the
Collective Investment Management Company,
(iii)
that the certificates of the units/refund
orders to the non-resident Indians shall be despatched
in time,
(iv)
that no units shall be issued to the
public later than six months after the date of the offer document i.e. the date when the offer document
is filed with the Board.
5. Fictitious Applications
Any person who makes in a fictitious name an
application for acquiring or subscribing for any units of a scheme, or otherwise
induces the scheme to allot, or register any transfer of units therein to him,
or to any other person in a fictitious name, shall be punishable under the
provisions of the SEBI Act, 1992.
6. Minimum Subscription
Clause
The Collective Investment Management Company shall
state that the minimum subscription of units necessary for the purpose of
launching the scheme. The minimum subscription clause is to be incorporated in
the offer document as under:
�If the scheme does not receive the above stated minimum subscription
of units from the public on the date of closure of the issue, then the entire
subscription amount received shall be refunded forthwith.�
7. Maximum Subscription
Clause
The Collective Investment Management Company shall
state the maximum number of units that shall be offered through the offer
document.
Minimum and Maximum - by
Appraising Agency compared.
8. Terms of the present issue
8.1 Terms of payments
8.2 Rights of the
investors
8.3 How to apply - availability of forms, offer document and mode of payment
8.4 Any special tax
benefits for investing in the scheme.
9. Appraisal of the Project
Project to be appraised by appraising agency for
carrying out appraisal and salient features of the appraisal report to be
detailed. The scope and purpose of the appraisal along with the date of
appraisal may be disclosed. The cost of the project and means of finance as per
the appraisal report should also be disclosed. The weakness and threats, if
any, given in the appraisal report should also be disclosed by way of risk
factors.
10. Project relating to the
scheme
The Collective Investment Management Company shall
disclose�
�� (i)� detail
particulars as are sufficient to disclose the true nature of the scheme,
� (ii)
the nature and description of property
and the conditions or circumstances under which it will become vested with the
trustee,
(iii)
with respect to the property purchased or
acquired or proposed to be purchased or acquired in relation to the scheme, the
following shall be given :
���� - the
name and address of the vendor(s)
���� - the
amount of cash or other consideration paid or payable to the vendor or each
vendor, as the case may be,
���� - short
particulars of any transaction relating to the property, in which any vendor of
the property or any person who is, or was at the time of the transaction,
having control or controlling interest in or director of the Collective
Investment Management Company or directly or indirectly related to the
Collective Investment Management Company
������� (if the property to be acquired by the
trustee is to be taken on lease then the term �vendor� would construe to mean �lessor�, the expression �purchase money� would include the
consideration for the lease)
(iv)
the amount or estimated amount of,
� (v)� the expense of setting up the scheme, and
(vi)
the expense of the issue, and the names
of the persons by whom any of these expenses have been paid or are payable.
11. Management of the Scheme
11.1 This section shall
describe the manner in which the scheme is managed. The disclosures shall
include�
�� (i) Identification
of Collective Investment Management Company and the name of the key personnel
of the Collective Investment Management Company who would be responsible for
managing the scheme along with his qualifications, experience and background;
� (ii)
Name and address of the Investor
Relations Officer;
(iii)
The name and the address of the
Collective Investment Management Company and the names and addresses of the
Directors on the Board of the Collective Investment Management Company with a
brief description of the experience of the Collective Investment Management
Company;
(iv)
disclosure of the date of entering the
Investment Management Agreement;
� (v)
Full information regarding the
remuneration/compensation of the trustee and the Collective Investment
Management Company respectively, the manner in which that
remuneration/compensation is provided for, and the changes (if any) that will
be made by way of that remuneration/compensation upon the sale of or
subscription for any units of the scheme and upon the distribution of income
and capital or otherwise in connection with the scheme.
11.2 The identity of any
other person who provides significant administrative or business management
services and a brief description of the services provided and the compensation
to be paid therefore.
11.3 The name and
principal business address of the Registrars and Transfer Agents. A statement
to the effect that the trustee and the Collective Investment Management Company
have ensured that the Registrar has adequate capacity to discharge
responsibilities with regard to processing of applications and despatching unit certificates to unit holders within the
time limit prescribed in the regulations and also has sufficient capacity to
handle investor complaints.
11.4 Identification and
name and address of the statutory auditor for the scheme.
12. Constitution of the
Collective Investment Scheme
Under this head, the following shall be discussed:
�� (i) A brief
description of the objectives of the scheme;
� (ii)
Functions and responsibilities of the
constituents of the Collective Investment Scheme viz., Collective Investment Management Company and trustee;
(iii)
Names and addresses of the Directors of
the trustee and details of their principal occupations and current
directorships;
(iv)
Summary of substantial provisions of the
Trust Deed which may be of material interest to the unit holders.
Units and Offer
13. Describe concisely
the nature and the most significant attributes of the units being offered,
including:
(i)
The minimum and maximum number of units on offer and refund
beyond this amount shall be disclosed.
(ii)
The circumstances under which refund may take place and the
period within which refunds must be carried out.
(iii)
A calendar indicating opening, closing, earliest closing,
allotment and despatch of certificates.
(iv)
The period within which allotment and despatch
of certificates will be completed and relevant regulations in this regard alongwith a statement to the effect that an advertisement
will be published in a newspaper soon after completion of allotment procedure.
(v)
Maturity period or duration of the scheme.
(vi)
The circumstances under which the scheme shall be wound up
(in accordance with regulations).
(vii)
Procedures to be followed for transfer and transmission of
units.
(viii)
The rights of the unit holders including voting, calling of
meetings etc.
(ix)
The address where the register of unit holders is or will be
kept and the days on which and the hours during which the register is or will
be accessible to the public.
(x)
The amount, if any, paid or payable as commission for
subscribing or agreeing to subscribe, or procuring or agreeing to procure
subscriptions for any units of the scheme, or the rate of any such commission.
Also, the names of persons having control or controlling interest in or
director of the Collective Investment Management Company who are entitled to
receive any such commission and the amount or rate of that commission.
(xi)
Any amount or benefit paid or given or intended to be paid
or given, to persons having control or controlling interest in or director of
the Collective Investment Management Company out of the proceeds of an issue of
units, and the consideration for the payment or giving of the amount or
benefit.
(xii)
The policy regarding the valuation of any investment made or
property held in relation to the scheme.
(xiii)
The policy regarding distribution of income to the unit
holders derived from the scheme.
14. Outstanding Litigations,
Defaults, Dues, etc.
�� (i) All pending
litigations in which the Collective Investment Management Company is involved,
defaults to the financial institutions/banks and non-payment of statutory dues
by the Collective Investment Management Company shall be listed in the offer
document together with the amounts involved and the present status of such
litigations/defaults.
� (ii)
The above information is required to be
furnished in addition to the litigations against the Collective Investment
Management Company or against any other entity whose outcome could have a
materially adverse effect on the position of the scheme.
(iii)
The pending proceedings initiated for
economic offences against the directors of the Collective Investment Management
Company, shall be disclosed separately indicating their present status. The
Collective Investment Management Company shall furnish the details of the past
cases in which penalties were imposed by the concerned authorities.
(iv)
Outstanding litigations, defaults, etc.,
pertaining to matters likely to affect operations and finances of the scheme
including disputed tax liabilities etc. shall be furnished in the offer
document.
� (v)
The Collective Investment Management
Company shall ensure to appropriately incorporate in the offer document and as
risk factor(s) information regarding pending litigations, defaults, non-payment
of statutory dues and proceedings initiated for economic offences/Civil
offences against the schemes.
(vi)
If any of the abovementioned litigations,
etc., arise after the filing of the offer document, the facts shall be
incorporated appropriately in the offer document (and as risk factors). In case
there are no such cases a distinct negative statement is required to be made in
this regard in the offer document.
(vii)
An enquiry/adjudication proceedings under
the SEBI Act and the regulations made thereunder,
that are in progress against the scheme or any company associated in any
capacity with the Collective Investment Management Company, trustee or any of
the Directors or key personnel of the Collective Investment Management Company
shall be disclosed.
15. Disclosure on investor
grievances and redressal system
The offer documents should disclose the arrangements or
any mechanism evolved by the Collective Investment Management Company for redressal of investor grievances. By way of additional
information, the company should disclose the time normally taken by it for
disposal of various types of investor grievances. Also describe briefly the
investor�s complaints history for the last three fiscal years of existing
scheme and the redressal mechanism, thereof. The
offer document should include data updated 30 days prior to the launch of the
scheme on the number of complaints received, redressed and pending with the
collective investment scheme.
16. Disclosures about stockinvests
The disclosures regarding manner of obtaining Stockinvests, and disposal of applications accompanied by Stockinvest,
Mode of drawing stockinvests, utilisation
of stockinvests by third party, time period for utilisation
of stockinvests by the purchasers should be incorporated at the appropriate
places in the offer document in line with the prevailing instructions of RBI in this regard. Further, name of the bank
through which the stockinvests shall be realised,
shall be given in the offer document. Also the following paragraph shall appear at the appropriate places :
�Registrars to the Issue have been authorised by the trustee to sign on behalf of the trustee to realise
the proceeds of the Stockinvest from the issuing bank
or to affix non-allotment advice
on the instrument or cancel the stockinvest of the
non-allottees or partially successful allottees who have enclosed
more than one stockinvest. Such cancelled Stockinvest
shall be sent back by the Registrars directly to the Investors.�
Stockinvests should be marked
account payee and inscribed with the words - Collective Investment Scheme - A/c Scheme.
17. Despatch
of Refund Orders
The following clause should be incorporated in the
offer document:
�The trustee shall ensure despatch of refund orders of value over Rs. 1,500 and unit
certificates by Registered Post only and adequate funds for the purpose will be
made available to the Registrars.�
18. Interest in case of delay
in despatch of allotment letters/refund orders
The caption should appear under terms of the present issue
and should contain the following:
�The trustee agrees that as far as possible
allotment of units offered to the public shall be made within 30 days of the
closure of the issue. The trustee further agrees that it shall pay interest
@15% per annum if the allotment letters/refund orders have not been despatched to the applicants within 30 days from the date
of the closure of the issue.�
19. Appointment of Compliance
Officer
The name of Compliance Officer appointed should be
mentioned in the offer document with details such as telephone number, fax
number and address on which he/she would be available. The investor�s attention
should also be invited to contact the Compliance Officer in case of any
pre-issue/post-issue related problems.
20. Promise vis-�-vis
performance
A separate para entitled
�Promise v. Performance - All
earlier Schemes� shall be given indicating whether all the objects mentioned in
the respective offer documents relating to the earlier schemes launched by the
Collective Investment Management Company were met and whether all projections
made in the said offer documents were achieved. If not, non-achievement of
objects/projections shall be brought out distinctly (shortfall/delay to be
quantified).
21. Utilisation
of stockinvest by third parties
SI should be utilised by the
purchaser(s) and the purchaser�s name/name of one of the purchasers should be
invariably indicated as the first applicant in the share application form.
Thus, if the signature of the purchaser on the stockinvest
and the signature of the first applicant on the application form does not
tally, the application should be treated as having been accompanied by a third
party stockinvest.
22. Utilisation
of stockinvest within 10 days
Stockinvests are to be used by
the purchaser(s) within 10 days of issue and for the purpose. The last day for
use of the SI for submitting application to the bank is indicated on the face
of the SI with a notation �To be used before ..........�.
23. Due Diligence Certificate
�� (i) The Collective
Investment Management Company, while filing the draft offer document with the
Board, shall furnish a due diligence certificate.
� (ii)
The Collective Investment Management
Company shall also:�
� (a)� certify that all amendments
suggested/observations made by Board have been given effect to in the offer
document;
� (b)
furnish a fresh certificate immediately
before the opening of the issue that no corrective action on its part is
needed;
� (c)
furnish a fresh certificate after the
issue has opened but before it closes for subscription.
24. The Collective Investment
Management Company shall submit with the offer document the following
certificates:
�� (i) all refund
orders of the previous issues were despatched within
the prescribed time and in the prescribed manner;
� (ii)
all unit certificates were despatched to the allottees
within the prescribed time and in the prescribed manner; and
25. Appointment of other
intermediaries
�� (i) Collective
Investment Management Company should ensure that the intermediaries being appointed
are registered with the Board, wherever required. The Collective Investment
Management Company shall independently assess the capability and the capacity
of the various intermediaries to handle the issue.
� (ii)
Collective Investment Management Company
should ensure that Bankers to the Issue are appointed in all the mandatory
collection centres.
(iii)
Collective Investment Management Company
shall ensure that Registrars to Issue registered with the Board are appointed.
(iv)
Registrar to an issue who is associated
with the Collective Investment Management Company as a promoter or a director
shall not be allowed to act as Registrar for that issue.
26. Offer document to be made
public
The draft offer document filed with the Board shall be
made public for a period of 21 days from the date of filing the offer document
with the Board. The Collective Investment Management Company shall make copies
of offer document available to the public. Collective Investment Management
Company can charge an appropriate sum to the person requesting for the copy.
27. Despatch
of Issue Material
The Collective Investment Management Company shall
ensure that offer document and other issue materials are dispatched to the
bankers to the issue, investors association etc. in advance.
28. No Complaints Certificate
After a period of 21 days from the date the draft offer
document was made public, the Collective Investment Management Company shall
file a statement with SEBI:
�� (i) giving a list of
complaints received by it,
� (ii)
a statement by it whether it is proposed
to amend the draft offer document or not, and
(iii)
highlight those amendments.
29. Mandatory Collection Centres
There should be at least 30 mandatory collection centres which should invariably include the places where
stock exchanges have been established.
30. Authorised
Collection agents
�� (i) The Collective
Investment Management Company�s are also permitted to appoint authorised collection agents subject to necessary
disclosures including the names and addresses of such agents being mentioned in
the offer document. While the modalities of selection and appointment of
collection agents are left to the discretion of the Collective Investment
Management Company�s, it should be ensured that the agents so selected are properly
equipped for the purpose, both in terms of infrastructure and manpower
requirements.
� (ii)
The collection agents should be permitted
to collect such applications as are accompanied by payment of application
moneys paid by cheques, drafts and stockinvests. Under no circumstances they should be
permitted to collect application moneys in cash.
(iii)
The applications so collected shall be
deposited in the special unit application account with designated scheduled
bank either on the same date or latest by the next working day. The application
forms along with duly reconciled schedules should be forwarded to the
Registrars to the Issue after realisation of cheques and after weeding out the applications in respect
of cheques return cases, within a period of 2 weeks
from the date of closure of the issue.
(iv)
The applications accompanied by stockinvests should be sent directly to the Registrars to
the Issue along with the schedules within one week from the date of closure of
the issue. Further, the offer documents and application forms should
specifically indicate that the acknowledgement of receipt of application moneys
given by the collection agents shall be valid and binding on the Collective
Investment Management Company and other persons connected with the issue.
� (v)
The investors from the places other than
from the places where the mandatory collection centres
and authorised collection agents are located, can
forward their applications along with stockinvests to
the Registrars to the Issue directly by Registered Post with Acknowledgement
Due and such applications shall be dealt with by the Registrars to the Issue in
the normal course.
31. Post issue Monitoring reports
�(a) Collective Investment Management
Company shall ensure the submission of the post issue monitoring reports
irrespective of the level of subscription. These reports are required to be
submitted within 3 working days from the due dates.
(b)
3-day post issue monitoring report
The due date for this report shall be the 3rd day from
the date of closure of subscription of the issue.
(c)
98-day post issue monitoring report
The due date for this report shall be the 98th day from
the date of closure of subscription of the issue.
Bankers to an issue
32. The trustee shall
ensure that moneys received pursuant to the issue shall be utilised
only after the minimum subscription as mentioned in the offer document has been
received and a statement to that effect has been given by the Registrars to the
Issue.
33. Post-issue advertisements
33.1 Collective
Investment Management Company shall ensure that in all issues, advertisement
giving details relating to oversubscription, basis of allotment, number, value
and percentage of applications received along with stockinvest,
number, value and percentage of successful allottees
who have applied through stockinvest, date of
completion of despatch of refund orders, date of despatch of certificates is released within 10 days from
the date of completion of the various activities in at least two national
dailies.
33.2 Collective
Investment Management Company shall ensure that advisors/brokers or any other
agencies connected with the issue do not publish any advertisement stating that
issue has been oversubscribed or indicating investors� response to the issue,
during the period when the public issue is still open for subscription by the
public.
33.3 Advertisement
stating that the subscription list has been closed may be issued after the
actual closure of the issue.
34. Other responsibilities
34.1 In case of delay in
refund of subscription moneys/excess subscription, the Collective Investment
Management Company shall ensure that the interest for the delayed period as
mentioned in the offer document, is paid to the applicants.
34.2 The Collective
Investment Management Company shall ensure that the despatch
of refund orders/allotment letters/share certificates is done by way of
registered post/certificate of posting as may be applicable.
35. Certificate Regarding Realisation of Stockinvests
�� (i) The Collective
Investment Management Company shall submit within two weeks from the date of
allotment, a Certificate to the trustee certifying that the stockinvests
on the basis of which allotment was finalised, have
been realised.
� (ii)
Subscription list for the scheme shall be
kept open for not more than 90 working days and this fact should be disclosed
in the offer document.
Retention of Oversubscription
36. The quantum of
issue shall not exceed the amount specified in the offer document. However, an
oversubscription to the extent of 10% of the amount mentioned is permissible
for the purpose of rounding off to the nearer multiple of 100 while finalising the allotment.
37. Updation
of Offer Document
�� (i) The Collective
Investment Management Company should ensure that the particulars (audited
statement) contained therein should not be more than 6 months old from issue
opening date.
� (ii)
Restrictions, if any, on transfer and
transmission of units.
(iii)
Tax treatment of Investments in schemes.
A detailed write-up on the various tax benefits that are available and the
taxes that are charged to the unit holders in the schemes.
38. Basis of Allotment
In each and every issue of units to the public that has
been oversubscribed, the Collective Investment Management Company and the Registrar
to an Issue, shall ensure that allotments are made in the following manner :
� (a)
Proportionate allotment procedure:
������� The allotment shall be subject to
allotment in marketable lots, on a proportionate basis as explained below:
�� (i) Applicants will
be categorised according to the number of units
applied for.
� (ii)
The total number of units to be allotted
to each category as a whole shall be arrived at on a proportionate basis i.e., the total number of units
applied for in that category (number of applicants in the category � number of
units applied for) multiplied by the inverse of the oversubscription ratio as
illustrated below :
Total
number of applicants in category of 100s - 1,500
Total
number of units applied for - 1,50,000
Number
of times oversubscribed - 3
Proportionate
allotment to category - 1,50,000 � 1/3
= 50,000
������� Number of the units to be allotted to
the successful allottees will be arrived at on a
proportionate basis i.e., total
number of units applied for by each applicant in that category multiplied by
the inverse of the oversubscription ratio.
Number
of units applied for by � 100
each
applicant
Number
of times oversubscribed - 3
Proportionate
allotment to each
successful
applicant ��������� - ��������� 100 � 1/3 = 33
������������������������������������������������������� (to
be rounded off to 100)
(iii)
All the applications where the
proportionate allotment works out to less than 100 units per applicant, the
allotment shall be made as follows:
������� *Each successful applicant shall be
allotted a minimum of 100 units; and
(iv)� *The successful applicants out of the total
applicants for that category shall be determined by drawal
of lots in such a manner that the total number of units allotted in that
category is equal to the number of units worked out as per (ii) above.
� (v)� If the proportionate allotment to an applicant
works out to a number that is more than 100 but is not a multiple of 100 (which
is the marketable lot), the number in excess of the multiple of 100 would be
rounded off to the higher multiple of 100 if that number is 50 or higher. If that
number is lower than 50, it would be rounded off to the lower multiple of 100. (As
an illustration, if the proportionate allotment works out to 250, the applicant
would be allotted 300 units. If however the proportionate allotment works out
to 240, the applicant would be allotted 200 units). All applicants in such
categories would be allotted units arrived at after such rounding off.
(vi)
If the units allocated on a proportionate
basis to any category is more than the units allotted to the applicants in that
category, the balance available units for allotment shall be first adjusted
against the category comprising applicants applying in number of units and
thereafter the remaining, if any surplus still remains, should be adjusted to
next higher category and so on till the surplus is fully used.
(vii)
As the process of rounding off to the
nearer multiple of 100 may result in the actual allocation being higher than
the units offered, it would be necessary to allow a 10% margin i.e., the final allotment may be
higher upto 110% of the size of the offering.
39. The Date of the Offer
Document
The date of the offer document shall be reckoned to be
the date when the offer document was
filed with the Board.
40. Trust Deed
� (a)
The offer date shall mention the date of,
and parties to, the trust deed relating to the collective investment scheme.
� (b)
The summary of the provisions of the
trust deed and the regulation regarding the retirement, removal and replacement
of trustee and Collective Investment Management Company.
41. Schemes and investments
All offer documents shall contain :
� (a)
All offer documents shall contain the
name and description and the date of commencement of operation of every other
scheme involving the issue of units to the public conducted by the Collective
Investment Management Company within the 5 years immediately preceding the date
of the offer document.
� (b)
A report by the Collective Investment
Management Company summarising the current investment
relating to the scheme made up to a date not more than 28 days before the date
of the offer document.
� (c)
A report by the auditor of the scheme, in
respect of every issue of units relating to any other scheme, launched by the
Collective Investment Management Company, within the five financial years
immediately preceding the date of the offer document, setting out such
information as sufficiently discloses the number of distribution (if any) of
income to holders to units relating to a Collective Investment Scheme in each
of the 5 financial years immediately preceding the date of the offer document
during which those units had been in existence, the amount and each
distribution and the nature and value of each of the components of the
distribution.
� (d)
A report by the auditors of the scheme,
setting out the profits or losses of the Collective Investment Management
Company in respect of each of the 5 financial years immediately preceding the
date of the offer document during which the Collective Investment Management
Company was carrying on business, and the rates of dividends (if any) paid by
the company in respect of each of those years, and the assets and liabilities
of the Collective Investment Management Company as at the last date on which
its accounts were made up being a date no more than 12 months before the date
of issue of the offer document.
SEVENTH SCHEDULE
Securities and Exchange Board of
[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,
� (c)
not contain statements which promise or
guarantee an appreciation of rapid profits,
� (d)
not contain any information or language
that is not contained in the offer document,
� (e)
not include any slogans or brand names
except the normal commercial name of the schemes,
�� (f)
not have slogans, expletives or
non-factual and unsubstantiated titles,
� (g)
contain risk factors giving equal
importance in all respects including the print size. The print size of
highlights and risk factors in issue advertisements shall not be less than
point 9 size. It shall mention the names of schemes, Collective Investment
Management Company, trustee, address of their registered office and Registrars
to the Issue,
� (h)
contain �Risk Factors� in respect of the
concerned issue :
������� Provided
that an offer opening/closing advertisement which does not contain the
highlights need not contain risk factors.
(2) A
scheme advertisement shall be considered to be misleading, if it contains�
�� (i) statements made
about the performance or activities of the schemes in the absence of necessary
explanatory or qualifying statements, which may give an exaggerated picture of
the performance or activities, than what it really is.
� (ii)
an inaccurate portrayal of past
performance or its portrayal in a manner which implies that past gains or
income will be repeated in the future.
(3) Any
advertisement reproducing or purporting to reproduce any information contained
in an offer document shall reproduce such information in full and disclose all
relevant facts and not be restricted to select extracts relating to that item.
(4) No
models, celebrities, fictional characters, landmarks or caricatures or the
likes shall be displayed on or form part of the offer documents or
advertisements of the scheme.
(5) No
corporate advertisement of the Collective Investment Management Company shall
be issued after 21 days of the filing of the offer document with the Board till
the closure of the scheme unless the risk factors as are required to be
mentioned in the offer document, are mentioned in such advertisement.
(6) No
advertisement shall be issued stating that the scheme has been fully subscribed
or oversubscribed during the period the scheme is open for subscription, except
to the effect that the issue is open or closed. No announcement regarding
closure of the issue shall be made except on the last closing date. If the
scheme is fully subscribed before the last closing date as stated in the offer
document, the announcement shall be made only after the scheme is fully
subscribed and such announcement is made on the date on which the issue is to
be closed.
(7)
Announcement regarding closure of scheme shall be made only after the trustee
is satisfied that at least minimum number of units have been subscribed and a
certificate has been obtained to that effect from the Registrar to the Issue.
(8) No
incentives shall be offered through any advertisements to any one associated
with marketing the issue.
(9) In
case there is a reservation for the Non-resident Indians, the scheme
advertisement shall specify the same and indicate the place in
(10)
The advertisement shall not compare one scheme with another, implicitly or
explicitly, unless the comparison is fair and all information relevant to the
comparison is included in the advertisement.
(11) If
any existing collective investment scheme indicates the past performance of the
scheme in advertisements, the basis for computing the rates of return/yield and
adjustments made (if any) must be expressly indicated with a statement that,
such information is not necessarily indicative of future results and may not
necessarily provide a basis for comparison with other investments.
(12)
Advertisements on the performance of a scheme or its Collective Investment
Management Company shall compare the past performances only on the basis of per
unit of statistics as per these regulations. Advertisements for NAVs, if any, must indicate the past as well as the latest
NAV of a scheme. The yield calculations shall be made as provided in these
regulations.
(13)
The trustee shall:
�� (i) ensure strict
compliance by the Collective Investment Management Company set with the code of
advertisement set out above,
� (ii)
obtain an undertaking from the Collective
Investment Management Company to the effect that the Collective Investment
Management Company shall not directly or indirectly release, during any
conference or at any other time, any material or information which is not
contained in the offer documents,
(iii)
ensure that the Collective Investment
Management Company obtains approval in respect of all scheme advertisements and
publicity materials from them.
EIGHTH SCHEDULE
Securities and Exchange Board of
[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 to send a notice by post of the proposed
meeting at least 7 days before the proposed meeting to each of the unit holders
or, in the case of joint holders, to the joint holder whose name appears first
in the records.
� (ii)
The trustee shall preside as chairman at
every meeting.
(iii)
Any unit holder may appoint another
person as his proxy to attend and vote instead of himself.
(iv)
Proxy so appointed shall not have any
right to speak at the meeting.
� (v)
Each unit holder shall have one vote for
every 1.00 unit of capital contributed by him (or his predecessor in title).
Except where expressly provided to the contrary in the deed or the regulations,
all decisions relating to the scheme shall be by ordinary resolution. Equality
of voting shall result in the resolution being deemed lost. The Chairman shall
have a casting vote. An extraordinary resolution shall be carried if
three-quarters of the votes are in favour of the
resolution.
(vi)
No business shall be transacted at a
meeting without a quorum. Quorum shall be met if unit holders (including
proxies) holding at least one-tenths in nominal value of the unit capital of
the scheme are present at the meeting.
(vii)
The Collective Investment Management
Company shall keep a minute book in which the Minutes and Resolutions of each
meeting shall be recorded.
(viii)
At any meeting a resolution put to the
vote of the meeting shall be decided on a show of hands unless a poll is
demanded by the Chairman or by any unit holder present in person.
(ix)
Entry of a resolution in the Minute Book
shall be conclusive evidence of the number of votes recorded in favour of or against the resolution.
� (x)
A resolution of the unit holders shall be
invalid if it constitutes a fraud on those unit holders who oppose the resolution.
NINTH SCHEDULE
Securities and Exchange Board of
[Regulations 21(13), 43(1), 44(4)(iii), 71(1)(e)]
Accounting norms,
investments and expense ceiling
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 including agents� commission,
if any;
�
fees to Lead Managers, if any, Registrars and collecting
banks;
�
initial rating and appraisal fees.
� (b)
These expenses shall be borne by the
scheme.
� (c)
These expenses shall not exceed
�� (i) 7.00 per cent of
the funds raised under the scheme for a scheme of duration upto
8 years and
� (ii)
9.00 per cent of the funds raised under
the scheme for a scheme having a duration of more than 8 years.
� (d)
These expenses shall be amortized equally
over a period not exceeding seven years or the period of the scheme, whichever
is less.
(2) Management and Advisory Fees to CIMC
� (a)
Such fees may consist of:
�
��� Basic Fee
�
��� Incentive Fee
� (b)
The �basic fee� shall not exceed:
�� (i) 1.00 per cent
each year of the funds raised under the scheme for the first five years of
operation of the scheme;
� (ii)
1.25 per cent each year of the funds
raised under the scheme for the next five years of operation of the scheme;
(iii)
1.50 per cent each year of the funds
raised under the scheme for the subsequent period thereof till the termination
of the scheme.
Incentive fees
The incentive fees shall not exceed 25 per cent of the
excess return realised over and above the indicative
return as shown in the offer document (excluding the unit capital) at the time
of the termination of the scheme. In case the return at the termination of the
scheme is less than or equal to the indicative return as shown in the offer
document, then no incentive fees shall be paid.
(3) Other Expenses
Only the following expenses should be borne by the
scheme namely :
�
registrar services for transfer of units sold or redeemed;
�
fees and expenses of trustees;
�
audit fees;
�
subsequent rating and appraisal fees;
�
listing fees;
�
other direct costs (if any) which are incidental to the
operation of the �scheme, as may be
approved by trustee;
(4) All
other expenses shall be borne by the CIMC.
PART II - ACCOUNTING NORMS
1. Accounting norms for plantation scheme
2. Unit Capital
2.1 All amounts received from an investor, by
whatever name called, during the period the scheme is open for subscription
shall be treated as towards the sale of units of the scheme and shall be
accounted as Unit Capital.
2.2 Unit capital will be disclosed in the
Balance Sheet of the Scheme under the head �Sources of Funds� (in the same
manner as Share Capital in the case of a limited company). No portion of Unit
capital shall be apportioned to revenue or to any other account under any
circumstances.
3. Costs Relating to Land
3.1 Land Acquired with Ownership Rights should
be accounted as a Fixed Asset in accordance with Accounting Standard 10
(�AS-10�) on �Accounting for Fixed Assets� issued by ICAI. In respect of land
with ownership rights, the cost of the land should be amortised
over the scheme period by way of a suitable charge to �Crop Development Expenses�.
3.2 Land acquired under lease may either be
against:
�
Payment of (non-refundable) premium; or
�
Payment of monthly or periodic lease rentals
Land acquired against payment of non-refundable
premium should be accounted as a Fixed Asset and separately disclosed in the
Fixed Assets schedule. Such premium paid for leasehold land should be capitalised as cost of land and amortized over the lease
period or the period of the scheme, whichever is less.
In respect of land acquired against the payment of periodic
lease rentals, such amounts shall be charged to the profit and loss account.
The following disclosures are required in the financial statements:
�
Period of Lease
�
Owner of land
�
Relationship of owner with trustees and directors of CIMC
�
If lease period is shorter than tenure of the Scheme, the
period of lease and conditions for future renewals of lease.
3.3 Land Development Expenses
These include expenses on :
�
New access roads and fencing
�
Major changes in land contours
�
Levelling, uprooting and
terracing
�
Regular upkeep and maintenance of land
Expenses of a
capital nature should be added to the cost of land.
In case of leasehold land, these expenses should be
written off over the period of the lease or the period of scheme, whichever is
less.
Expenses of a revenue nature should be charged to the
Profit and Loss Account in the year in which they are incurred.
3.4 Infrastructure and other facilities shall
include :
�
Roads and Fencing
�
Security and Research and Development Buildings
�
Drip Irrigation systems, water systems
�
Agriculture Equipments and Production facilities
These should be accounted as Fixed Assets in accordance
with AS-10 on �Accounting for Fixed Assets� issued by ICAI.
3.5 IAS 36 requires that impairment losses in
respect of assets should be recognised. Impairment
arises whenever an asset�s carrying amount exceeds its recoverable amount. All
impairment losses should be provided for.
3.6 In case such assets are taken on lease,
then the amounts spent should be accounted on the same basis as mentioned in
Paragraph 3.2 and the disclosure requirements mentioned therein will also
apply.
4. Fixed Assets (other than land and related
infrastructure facilities)
4.1 Such Fixed Assets should be accounted in
accordance with AS-10 on �Accounting for Fixed Assets� issued by ICAI �
Basically that the cost of a fixed asset comprises its purchase price and any
attributable cost of bringing the asset to its working condition for its
intended use.
4.2 These assets should be depreciated as per
Schedule XIV to the Companies Act, 1956.
4.3 Capital Subsidies received should be
accounted as per Accounting Standard (�AS�) � 12 on �Accounting for Government
Grants� issued by ICAI � Basically that the recognition of a grant should
depend on assurance of the compliance of conditions and certainty of receipts
and grants relating to specific fixed assets should be deducted from the gross
value of assets in arriving at their book value.
4.4 As required by IAS 36, impairment losses in
respect of assets should be recognised. Impairment arises
whenever an asset�s carrying amount exceeds its recoverable amount.
4.5 In case such assets are taken on lease,
then the amounts spent should be accounted on the same basis as mentioned in
Paragraph 3.2 and the disclosure requirements mentioned therein will also
apply.
5. Crop Development Expenses
5.1 There are generally expenses incurred for
development and upkeep of crop. This includes expenses on:
�
Soil Manuring.
�
Sapling and crop
�
Regular maintenance and upkeep of crop.
�
Lease rentals paid for land and for any other assets
directly attributable to crop development.
�
Amount proportionately amortised
over the scheme period relating to cost of land.
�
Depreciation and maintenance of fixed assets directly
attributable to crop development.
�
Other expenses directly attributable to crop development.
These expenses should be accounted as �Crop Development
Expenses�. They should be disclosed as a separate item appearing between �Fixed
Assets� and �Current Assets� in the Balance Sheet.
5.2 The total of Crop development expenses at
the end of the year should be compared with Net Realisable
Value (�NRV�). NRV would generally mean the amount that would be realised in the normal course, in case the standing crops
are disposed of on that day. NRV can be determined on the basis of estimated
selling price in the ordinary course of business less estimated cost to be
incurred in future for bringing the crop to maturity, and the cost necessarily
to be incurred to make the sale. In case the NRV is lower than the total of the
crop development expenses at the year end, then a suitable provision for the
difference between these two figures should be made and disclosed as follows :
Crop Development Expenses (At Cost) ��������������X
Less : Provision for diminution in value ��������������Y
����������������������������������������������������������������������� __________
����������������������������������������������������������������������� ������ X-Y
5.3 The crop development expenses and the
provision for diminution will be carried forward to the next year at gross
values. A similar exercise would be done at the end of each year. In case the
NRV at the end of the second or subsequent year is greater than/or equal to
cost in the respective year, then it will be possible to recoup the provision
account by transferring it to the credit of Profit and Loss Account only to the
extent such a provision was made in the past. The basic principle of valuation
at lower of Cost or NRV, would still hold good every year. In case the crop is
at such a stage that it is not possible to determine NRV, these expenses should
be valued At Cost and a suitable disclosure to that effect should be made in
the financial statements. These expenses will be set off against income arising
from the sale of crops, either in stages or at the terminal point.
5.4 Considering the peculiar nature of this
expenditure and the long production cycle, �Crop Development Expenses� should
be separately disclosed between �Fixed Assets and Current Assets� as discussed
in Paragraph 5.1 above.
6. Investments
6.1 All investments should be carried at lower
of cost and fair value determined either on an individual investment basis or
by category of investment, but not on an overall (or global) basis.
6.2 In respect of quoted investments, market
value generally provides the best evidence of fair value.
6.3 Unquoted investments in debt instruments
should be valued on a yield to maturity basis, the capitalisation
factor being determined for comparable traded investments and with an
appropriate discount for lower liquidity.
7. Inventory Valuation
Inventories other than Crop Development Expenses should
be valued as per the basic principles laid down by AS 2 on Inventory Valuation
� Inventory should be valued at the lower of cost and net realisable
value and the Accounting Policy for valuation should be disclosed in the
financial statements.
8. Revenue Recognition
8.1 Revenue should be recognized as per
Accounting Standard (�AS�) � 9 on �Revenue Recognition� issued by Institute of
Chartered Accountants of India, to the extent it is applicable � Revenue should
be recognised only if there is a reasonable certainty
of collectibility or measurability.
8.2 Income would generally arise from the following
sources:
�
Sale of Crops - the sale
proceeds of crops arising at periodical intervals should be accounted during
the year in which the sale has been effected. The cost allocable to such sale
proceeds should be set off against the crop development expenses account and
the surplus, if any, should be transferred to Profit and Loss account.
�
����
�
���Income from Investments - income arising
out of investments of surplus bank balances, etc. shall be accounted on a time
proportion basis taking into account the amount outstanding and the rate
applicable.
�
��� Dividend from Investments -
dividends, if any, will be recognized when the right to receive payment is
established.
�
��� Sale of Standing Crops at terminal point -
sale proceeds/transfer value of the standing crops at the terminal point shall
be accounted as and when they are disposed off/transferred. The profit arising
on such transactions over the book value shall be accounted at the point of
sale/disposal; this should be set off against the crop development expenses.
9. Expenses
9.1 Expenses other than Crop Development
Expenses can be broadly classified as under:
�
��� Initial Marketing
and Launch Expenses
�
��� Normal Business
Expenses
9.2 Initial issue expenses
Initial issue expenses may be treated as deferred
revenue expenses to be written off over eight years or duration of the scheme
whichever is earlier.
9.3 Normal Business Expenses would include:
�
��� Registrar services
for transferor of units sold or redeemed
�
��� CIMC and trustee
Fees
�
��� Depreciation
�
��� Audit Fees
�
��� Subsequent Rating
and Appraisal Fees
�
��� Listing Fees
�
��� Other costs, (if
any), which are incidental for the operation of the scheme, as may be approved
by trustees.
These expenses shall be treated as an expense of the
year in which they are incurred and written off to the Profit and Loss Account.
10. Returns to Investors
10.1 Interim Returns to investors in respect of
CIS can be paid only out of the distributable surplus of the CIS. Interim
Returns can be paid only in cash and not in kind.
10.2 �Distributable surplus� means the profits
of the CIS after:
�
��� Providing for all
expenses on accrual basis including depreciation as discussed in paragraph 4.2 above
�
��� Providing for
diminution in value of crop development expenses as discussed in paragraph 5.2
above
�
��� Fully setting off
the debit balance in Profit and Loss account, if any
�
��� Transferring 50% of
the remaining balance to a separate reserve called �Special Reserve�
10.3 The amount of interim returns distributed
to investors should not exceed the distributable surplus.
10.4 The balance in the Special Reserve cannot
be utilised for any purpose except for distribution
to unit holders at the termination of the scheme.
10.5 At the end of the tenure of the Scheme, the
surplus of the scheme, if any, shall be calculated on the basis of realisable value of all the assets, including land, of the
Scheme. The surplus of the scheme distributed in cash shall be in proportion to
unit capital.
Accounting norms: Livestock Scheme
1. Costs relating to owned land
1.1 Land acquired with ownership rights should
be accounted as a Fixed asset in accordance with Accounting Standard 10 (AS-10)
on �Accounting for Fixed Assets� issued by ICAI.
1.2 Cost of such land should not be amortised over the scheme period (refer paragraph 2.3
above).
2. Livestock development expenses
2.1 There are generally expenses incurred on
rearing and development of livestock including maintenance and upkeep. This
includes expenses on:
�
��� Cost of base stock.
�
��� Food costs.
�
��� Medicines and other
maintenance.
�
��� Cost of artificial
insemination.
�
��� Lease rentals paid
for land and for any other assets directly attributable to livestock
development.
�
��� Depreciation and
maintenance of fixed assets directly attributable to livestock development.
�
��� Any other expenses
directly attributable to livestock development.
These expenses
should be accounted as �Livestock Development Expenses�. They should be
disclosed as a separate item appearing between �Fixed Assets� and �Current
Assets� in the balance sheet. (Reference is invited to Paragraph 5.1).
2.2 Valuation of livestock development expenses
and provision for diminution in value would be in the same manner as in respect
of crop development expenses which is discussed in Paragraphs 5.2 and 5.3.
3. Livestock Trading
3.1 Separate quantitative information should be
maintained in respect of livestock that is procured for resale without being
used in rearing/development activity. An annual trading account should be
prepared in respect of Livestock traded during the year (which shall be
exclusive of Livestock under rearing/development).
3.2 A suitable annual charge should be made in
respect of cost of maintenance etc. of the livestock which remained for trading
purpose only. The cost of maintenance etc. to be charged to the livestock
trading account shall be calculated on the basis of quantitative proportion of
livestock held under rearing/development and for trading.
4. Valuation of by-products
4.1 Inventory of by-products at the year end (i.e.,
manure in case of Goat, eggs in case of Poultry etc.) should be carried at
�lower of cost or market value�.
4.2 Cost of by product shall be calculated on
the basis of specific cost incurred on the by-product after the point of
separation to make it marketable.
PART III -FORMAT OF FINANCIAL STATEMENTS
Basic Framework relating to Financial Statements
1. Scheme wise financial statements
1.1 Broadly, financial statements would consist
of
�
��� Balance sheet
�
��� Revenue account
1.2 These should be prepared schemewise
2. Contents of scheme wise Balance sheet
2.1 Asset side of the balance sheet
The assets of the balance sheet shall be grouped into
the following categories :
�
��� Fixed assets
�
��� Investments
�
��� Crop development
expenses
�
��� Current assets
�
��� Deferred revenue
expenditure
I. Fixed assets
Cost, accumulated depreciation and net block should be
disclosed for each of the following:
�
��� Land
�
��� Leasehold land
�
��� Land development
expenses
�
��� Infrastructure and
other facilities
�
��� Buildings
�
��� Plant and machinery
�
��� Furniture and
fixtures
�
��� Research and
development assets
�
��� Others
II. Investments
The following types of investment shall be separately
disclosed:
�
��� Central or State
Government securities
�
��� Deposits with
scheduled banks
�
��� Debentures, Bonds
and Deposits with public sector companies and financial institutions
�
��� Other Investments
III. Crop Development
Expenses
The following information should be disclosed:
�
��� Opening balance
�
��� Expenses incurred
during the year
�
��� Deductions
�
��� Closing balance
In addition, net realisable
value at year end and the Break up of various expenses included in closing
balance should be disclosed. The closing balance in provisions for diminution
in value in Crop Development Expense Account, if any, will be shown as a deduction
from closing balance of Crop Development Expenses.
IV. Current assets
The following should be separately disclosed :
�
��� Balances with banks
in current account
�
��� Cash on hand
�
��� Sundry debtors,
distinguishing between good and doubtful
�
��� Inventories
�
��� Outstanding and
accrued income
�
��� Advances
recoverable in cash or kind
�
��� Deposits
�
��� Others
V. Deferred revenue
expenditure
The following should be disclosed:
�
��� Opening balance
�
��� Additions during
the year
�
��� Amount amortised during the year
�
��� Closing balance
VI. The debit balance in
Profit and Loss Account, if any, shall be brought out
2.2 Liability side of the balance sheet
Liabilities in the balance sheet shall be grouped into
the following categories:
�
��� Unit Capital
�
��� Reserves and
Surplus
�
��� Current liabilities
and provisions
I. Unit Capital
Unit capital (including number of units and face value
per unit)
II. Reserves & Surplus
The following should be separately disclosed:
�
��� General reserve
�
��� Revaluation reserve
�
��� Special reserve
�
��� Any other reserve
(disclosing its nature)
�
��� Surplus in Profit
and Loss account
III. Current liabilities and
provisions
� (a)
Current Liabilities
������� The following should be separately
disclosed :
�
��� Sundry creditors
�
��� Statutory
liabilities
�
��� Bank account
overdrawn as per books
�
��� Unclaimed
distributed income
�
��� Others
� (b)
Provisions
������� The following should be separately
disclosed:
�
��� Provision for
gratuity
�
��� Proposed income
distribution on unit capital
�
��� Provision for
taxation
�
��� Other provisions
IV. Contingent liabilities
Disclosure should be made of all contingent liabilities,
showing separately the nature and amount of each such liability.
3. Contents of scheme wise Revenue account
3.1 Income
The following should be separately disclosed:
�
��� Surplus on
�
��� Dividend
�
��� Interest
�
��� Profit on
sale/fixed assets and investments
�
���
�
��� Other income
(indicating nature)
3.2 Expenses and losses:
The following should be separately disclosed:
�
��� Crop development
expenses also disclosing each major item of expense under this head
�
��� Provision for
doubtful debtors and other assets
�
��� Loss on sale of
fixed assets and investments
�
��� Management fees
�
��� Trusteeship fees
�
��� Registration and
local charges
�
��� Audit fees
�
��� Repairs and
maintenance
�
��� Deferred revenue
expenses written off
�
��� Depreciation of
fixed assets
�
��� Registration fees
�
��� Other operating
expenses
3.3 Increase/decrease in amount of Crop
Development Expenses.
4. Accounting policies
Accounting policies in respect of the following should
be separately disclosed at one place and form part of the financial statements:
� (a)
Fixed assets
�� 1. Land
�� 2. Others
� (b)
Depreciation
�� 1. Land
�� 2. Others
� (c)
Investments
� (d)
Crop Development Expenses (major items
under this head should be disclosed)
� (e)
Inventories
�� (f)
Revenue recognition
� (g)
Retirement benefits
� (h)
Foreign currency transactions
�� (i) Deferred revenue
expenditure
5. Approval and authorisation
The financial statements shall be signed by the schemewise fund managers and the Board of trustees and
reported upon by the Auditors. They should be approved at a meeting of the
Board of Directors of the Collective Investment Management Company and also at
a meeting of the trustees or in case of a trustee company, by the Board of
directors of the trustee Company.
6. Auditors report
6.1 All funds operating CIS shall be required
to get their accounts audited in terms of a provision to that effect in their
trust deeds. The Auditors� Report shall form a part of the Annual Report. It
should accompany the Balance Sheet, Profit and Loss Account and Revenue Account.
The auditor shall report to the Board of trustees and not to the unitholders.
6.2 The auditor shall state whether:�
� (a)
he has obtained all information and
explanations which, to the best of his knowledge and belief, were necessary for
the purpose of his audit,
� (b)
the Balance Sheet, Profit and Loss
Account and the Revenue account are in agreement with the books of account of
the scheme.
6.3 The auditor shall give his opinion as to
whether:
� (a)
the Balance Sheet gives a true and fair
view of the schemewise state of affairs of the scheme
as at the balance sheet date, and
� (b)
the Profit and Loss Account gives a true
and fair view of the surplus/deficit of the scheme for the year/period ended at
the Balance Sheet date, and
� (c)
the Revenue Account gives a true and fair
view of the schemewise surplus/deficit of the scheme
for the year/period ended at the balance sheet date.
[1] Substituted
by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2000, w.e.f.
"(a) the purpose of which is to enable the investors to participate in the scheme�� or arrangements by way of subscriptions and to receive profits or income or� produce arising from the management of such property or the investments made thereof; and
(b) in which the subscriptions of the investors by whatever name called, are� pooled, and are utilized for the purposes of the schemes or the arrangements; and
(c) in which the property or such subscriptions are managed on behalf of the investors, who do not have day to day control over the management or operation of the scheme, whether or not such properties or subscriptions and the investments made thereof are evidenced by identifiable properties or otherwise;
Provided that following shall not be deemed to be a collective investment scheme:
(a) acceptance of deposits by companies under section 58A of the Companies Act, 1956 (1 of 1956) or by Non-Banking Financial Companies as defined in� section 45-I of the Reserve Bank of India Act, 1934 ( 2 of 1934 );
b) acceptance of funds by Chit Funds in terms of the Chit Funds Act, 1982 (40� of 1982);
(c) acceptance of funds by companies declared as Nidhi companies under section 620A of the Companies Act, 1956, ( 1 of 1956 ), as per directions issued under, section 637A of the said Act;
(d) contracts of insurance under the Insurance Act, 1938 ( 4 of 1938 );
(e) any scheme of the employer as per Employees� Provident Fund and Miscellaneous Provisions Act, 1952, ( 19 of 1952); or any other recognized Provident Fund under the Income Tax Act, 1961;
(f) arrangements of cooperative societies under the Cooperative Societies Act, 1912 ( 2 of 1912 ) including Cooperative Societies registered under any Provincial Act or State Act for the time being in force;
(g) any scheme under Securities and Exchange Board of India (Mutual Funds ) Regulations, 1996; or
(h) any other scheme or arrangement specifically
exempted by the Board, from the operation of these regulations.�
[2] Substituted by the SEBI
(Intermediaries) Regulations, 2008, w.e.f.
�9A.
Applicability of the Securities and Exchange Board of
[3] Substituted
by the Securities and Exchange Board of
�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 Management Company as the case may be, and give him an opportunity of being heard within fourteen days from the date of receipt of such communication.
(2) Without prejudice to its right to initiate necessary action under the Act and these regulations, the Board upon receipt of the reply, if any, from the trustee or Collective Investment Management Company may call upon it to take such remedial measures as the Board may direct in this behalf and may also initiate action under Chapter VIII of these regulations.�
[4] Substituted for �the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002� by the SEBI (Intermediaries) Regulations, 2008, w.e.f. 26-05-2008.
[5] Omitted
by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing
Penalty) Regulations, 2002, w.e.f.
[6]
Substituted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and
Imposing Penalty) Regulations, 2002, w.e.f,
[7] Substituted for �the Securities and Exchange Board of India (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002� by the SEBI (Intermediaries) Regulations, 2008, w.e.f. 26-05-02008
[8] Regulations 60 to 64 omitted by the SEBI (Procedure for Holding Enquiry by Enquiry Officer and Imposing Penalty) Regulations, 2002, w.e.f. 27-09-2002.
[9]
Substituted by the SEBI (Appeal to the Securities Appellate Tribunal)
(Amendment) Regulations, 2000, w.e.f.
�Any person aggrieved by an order of the competent authority or the Board under these regulations:
(a) suspending the certificate of registration; or
(b) canceling such certificate; or
(c) issuing directions under regulation 65
may prefer an appeal to the Central Government against
such order, in accordance with the Securities and Exchange Board of India (
Appeals to Central Government) Rules, 1993."
[10] Word
�one� in clause (a) of sub-regulation (1) of Regulation 71 is substituted by
the Securities and Exchange Board of India (Collective Investment Schemes)
(Amendment) Regulations, 2002, w.e.f,
[11] Word
�one� in clause (b) of sub-regulation (1) of Regulation 71 is substituted by
the Securities and Exchange Board of India (Collective Investment Schemes)
(Amendment) Regulations, 2002, w.e.f,
[12] Word
�one� in clause (c) of sub-regulation (1) of Regulation 71 is substituted by
the Securities and Exchange Board of India (Collective Investment Schemes)
(Amendment) Regulations, 2002, w.e.f,
[13] Word �one� in clause (d) of sub-regulation (1) of Regulation 71 is substituted by the Securities and Exchange Board of India (Collective Investment Schemes) (Amendment) Regulations, 2002, w.e.f, 17-01-2002.
[14] Word
�one� in clause (e) of sub-regulation (1) of Regulation 71 is substituted by
the Securities and Exchange Board of India (Collective Investment Schemes)
(Amendment) Regulations, 2002, w.e.f,