Collective Investment Schemes -Public Notice

Oct 01, 2002
Public Notices



The Central Government vide its press release dated November 18, 1997 decided that schemes through which instruments such as Agro Bonds, Plantation Bonds etc. are issued by entities would be treated as Collective Investment Schemes (CISs) coming under the provisions of the SEBI Act, 1992. Accordingly, SEBI vide its press release dated November 26, 1997 and its public notice dated December 18, 1997 directed existing schemes to file the details of their schemes with SEBI. In response, SEBI received information from 642 entities.

On notification of the SEBI (CISs) Regulations, 1999 on October 15, 1999 an existing collective investment scheme, subject to the provisions of Chapter IX of these Regulations, was required to make an application for grant of certificate of registration. The extended last date for making an application by such entities was March 31, 2000. SEBI has received applications for grant of certificate of registration from 35 existing entities who had earlier filed information with it. Besides, 2 entities who had earlier not filed information with SEBI have applied for registration.

Further, under the provisions of the Regulations an existing collective investment scheme which has failed to make an application or is not desirous of obtaining registration has to compulsorily wind up the schemes and make payment to the investors. Therefore, as per the provisions of the Regulations, the 605 existing entities, who had earlier filed information with SEBI and whose names are mentioned hereinbelow, have to compulsorily wind up their schemes and make payment to the investors latest by May 28, 2000 failing which they shall face the following legal / administrative action :

  1. Initiation of prosecution under Section 24 of SEBI Act, 1992 which prescribes imprisonment for a term which may extend to one year or with fine or with both.
  2. In case of offences by the companies the persons who are in charge for the conduct of the business of the company as well as the company, its directors, managers, secretary or other officers are liable to be proceeded against and punished under Section 27 of SEBI Act, 1992.
  3. Directions under Section 11 B of the SEBI Act, 1992 and Regulation 65 of the SEBI (Collective Investment Schemes) Regulations, 1999 which may entail: (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; and (e) prohibiting the person concerned from operating in a capital market or from accessing the capital market for a specified period.
  4. Informing to the Department of Company Affairs to consider initiation of liquidation proceedings against these entities for failure to repay the investors.
  5. Writing to the State Governments / local police to register civil / criminal case against these entities.

The names of the entities are as under