Mutual funds pool money from investors and invest it in a portfolio of securities to generate returns. They offer benefits like professional management, diversification, reduced costs, liquidity and convenience. Mutual funds are organized as trusts with sponsors that form the trust and register it with SEBI. Trustees appoint an Asset Management Company approved by SEBI to manage the fund's investments. SEBI regulates the structure, market activities and investor protection of mutual funds in India.

1. Mutual Funds

2. Contents
1. Concept of MF
2. Benefits
3. Organisation of MF
4. Types of MF schemes
5. Regulation of MFs
6. AMFI

3. 1. Mutual Fund
• A financial intermediary that pools savings of
investors and invests the accumulated funds in
a diversified portfolio of securities
• Total return from the investments made by
the fund minus the expenses is shared by the
investors in the fund

4. 2. Benefits of MFs
• Professional management & expertise
• Diversification benefits
• Reduction in transaction costs
• Liquidity
• Convenience
• Flexibility
• Tax benefits

5. 3. Organisation of MFs
• MFs can be established by a sponsor
• MF has to be registered with the SEBI subject to
the fulfillment of specified criteria
• Sponsors can be: bank, financial institution,
domestic / foreign co. or joint venture
• In India MFs can be established in the form of a
trust u/Indian Trusts Act, 1882
• Sponsor forms the trust and registers it with SEBI
• Trustees appoint AMC with approval of SEBI

6. 3. Organisation of MFs
• AMCs & Trust have to comply with provisions of
Indian Companies Act
• MFs are governed by SEBI (MF) Regulations, 1996
• Assets of MF are held with a custodian registered
with SEBI
• Custodian is appointed by Trustee and is
independent of sponsor
• Registrars & Transfer Agents: Accept & process
applications, correspondence with investors

7. 4. Types of MF Schemes
• Open ended schemes
• Close ended schemes
• Income fund
• Growth fund
• Balanced fund
• Equity fund
• Debt fund
• Hybrid fund

8. 4. Types of MF Schemes
• Sectoral funds
• Fund of Funds
• Quant funds
• Exchange traded funds (ETF)
• Gold Exchange Traded Funds
• Real Estate Mutual Funds

9. 5A. Regulation of MFs
• SEBI (MF) Regulations, 1996
• SEBI regulates structure, market & investor
related activities of MFs
• Issues related with ownership of AMCs by
banks are regulated by RBI

10. 5B. SEBI (MF) Regulations, 1996
• MF schemes
• Investment objectives
• Pricing of units
• Investment by various types of schemes
• Disclosure requirements
• Reporting requirements
• Existing schemes
• Overseas investments by MFs

11. 6. The Association of Mutual Funds in India
• AMFI: Estd. in 1993
• The goal of AMFI is to develop the Indian MF
industry on professional & ethical grounds and to
maintain standards for protecting & promoting
the interests of the unit-holders & MFs
• AMFI plays a catalytic role in setting new
standards & improving existing ones
• AMFI has started AMFI Certified Intermediaries
and started registering distributor agents
• There are many more achievements of AMFI
• Note: Students must read achievements of AMFI