| Collective_Investment_Scheme_Apr17_2020 |
| 3 No person other than Collective Investment Management Company to |
| 23 Termination of the Agreement with the Collective Investment |
| 59 Liability for action in case of default Officer and Imposing Penalty) Regulations, 2002 |
| 74A Existing schemes or arrangements deemed to be a collective investment scheme to |
| 1 (1) These regulations may be called the Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999. |
| 1 (2) They shall come into force on the date of their publication in the Official Gazette. |
| 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 ofoffer documents;(ii) any other matter to which publicity is given through print medium, radio, televisionprogrammes or electronic media;(c) 'appraising agency' means an agency empanelled with the Board for the purpose ofconducting technical or financial appraisal of the 1[collective investment 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 thetrustee, as the case may be, or1 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.(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 theCollective Investment Management Company or the trustee, as the case may be;(e) 'auditor' means a person qualified to audit the accounts of companies under theCompanies Act, 1956;(f)'Board' means the Securities and Exchange Board of India established under theprovisions of section 3 of the Act;(g) 'certificate' means a certificate of registration granted under regulation 10 of theseregulations;(h) 'Collective Investment Management Company' means a company incorporated under theCompanies 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) ofthis regulation;(j)'closed-ended 2 [collective investment scheme]' means any 3 [collective investmentscheme] launched by a Collective Investment Management Company, in which the periodof maturity of the 4[collective investment scheme] is specified and there is no provisionfor re-purchase before the expiry of the maturity of the 5[collective investment scheme];(k) 'control' or 'controlling interest' means control exercised or controlling interest held :(i)(ii)(iii)in case of a company, by any person or combination of persons who directlyor indirectly own, control or hold shares carrying not less than 10% of thevoting 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 exercisecontrol over the Collective Investment Management Company;(l)'credit rating agency' means a body corporate registered under Securities and ExchangeBoard of India (Credit Rating Agencies) Regulations, 1999;(m)'depository' means a body corporate as defined in the Depositories Act, 1996 (22 of1996);(n) 'economic offence' means an offence to which the Economic Offences (Limitation ofProsecutions) 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 ContractAct, 1872 (9 of 1872);(q) ' inspecting officer ' means any person appointed as such by the Board under Chapter VIIof these regulations;2 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.3 ibid.4 ibid.5 ibid.(r)'key personnel' in relation to a company, means the persons who exercise effectivecontrol 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 ofaccumulated losses and deferred expenditure not written off, including miscellaneousexpenses not written off;(t)'offer document' means any document by which applications for subscribing to units ofthe 6[collective investment 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 toan 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;7[(y) ****](z)'8[collective investment scheme] property' includes:i.ii.iii.subscription of moneys or money’s worth (including bank deposits) to the9[collective investment scheme];property acquired, directly or indirectly, with, or with the proceeds of,subscription of money referred to in item (i) of this Clause; orincome arising, directly or indirectly, from subscription money or propertyreferred to in item (i) or (ii),z) 'securities laws' means:i.ii.iii.the Securities and Exchange Board of India Act, 1992 (15 of 1992);the Securities Contracts (Regulation) Act, 1956 (42 of 1956); andthe Depositories Act, 1996 (22 of 1996), as amended from time to time;aa) 'stock broker' means a stock broker as defined in Securities and Exchange Board ofIndia (Stock Brokers and Sub-brokers) Rules, 1992;bb) 'trustee' means a person who holds the property of the collective investment scheme intrust for the benefit of the unit holders, in accordance with these regulations;cc) 'unit' includes any instrument issued under a 10 [collective investment scheme], bywhatever name called, denoting the value of the subscription of a unit holder; anddd) 'unit holder' means a person holding a unit in a 11[collective investment scheme].6 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.9-1-2014.8 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.9 ibid.10 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014. |
| 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 investmentscheme. |
| 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. |
| 4A (1) Any person proposing to carry on or sponsor or launch any scheme or arrangement which would be deemed to be a collective investment scheme under the proviso to sub-section (1) of section 11AA of the Act, shall make an application for grant of registration as a Collective Investment Management Company in Form A: Provided that any scheme or arrangement which is otherwise regulated or prohibited under any other law shall not be deemed to be a collective investment scheme. |
| 4A (2) All other provisions of these regulations and the guidelines and circulars issued thereunder, shall apply to any scheme or arrangement deemed to be a collective investment scheme under the proviso to sub-section (1) of section 11AA of the Act.] |
| 5 (1) Any person who immediately prior to the commencement of these regulations was operating a 15[collective investment 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. |
| 5 (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 withaccordingly. |
| 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 13 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.14 Inserted, ibid. |
| 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. |
| 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. |
| 8 (2) The Board, if it so desires, may ask the applicant or its authorized representative to appear before the Board for personal representation in connection with the grant of a certificate. |
| 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 ofcollective 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 aminimum net worth of rupees three crores which shall be increased to rupees fivecrores 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 collectivef)investment scheme in accordance with the provision of these regulations ;the directors or key personnel of the applicant shall consist of persons of honestyand integrity having adequate professional experience in related field and havenot been convicted for an offence involving moral turpitude or for any economicoffence or for the violation of any securities laws;g) at least fifty per cent of the directors of such Collective Investment ManagementCompany shall consist of persons who are independent and are not directly orindirectly associated with the persons who have control over the CollectiveInvestment Management Company;h) no person, directly or indirectly connected with the applicant has in the past beenrefused registration by the Board under the Act.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 suchperson 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 ManagementCompany, 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 investmentscheme;(k) in case the applicant is an existing collective investment scheme, it complies with theprovisions of Chapter IX of these regulations . |
| 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.] |
| 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. |
| 10 (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. |
| 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 adirector in any other Collective Investment Management Company unless suchperson is an independent director referred to in clause (g) of regulation 9 andapproval of the board of Collective Investment Management Companies of whichsuch person is an independent director, has been obtained;the Collective Investment Management Company shall forthwith inform theBoard of any material change in the information or particulars previouslyfurnished, which have a bearing on the certificate granted by it;appointment of a director of a Collective Investment Management Company shallbe made with the prior approval of the trustee;(b)(c)16 Substituted by the SEBI (Intermediaries) Regulations, 2008, w.e.f. 26-05-2008. Prior to itsRegulations, 2004, w.e.f. 10-03-2004, read as under:'9A. Applicability of the Securities and Exchange Board of India (Criteria for Fit and ProperPerson) Regulations, 2004. – The Provisions of the Securities and Exchange Board of India(Criteria for Fit and Proper Person) Regulations, 2004, shall, as far as may be, apply to allapplicants or the Collective Investment Management Companies under these regulations.'(d)(e)(f)the Collective Investment Management Company shall comply with provisions ofthe Act and these regulations;no change in the controlling interest of the Collective Investment ManagementCompany shall be made without obtaining prior approval of the Board, the trusteeand the unit holders holding at least one-half of the nominal value of the unitcapital of the 17[collective investment scheme];the Collective Investment Management Company shall take adequate steps toredress the grievances of the investors within one month from the date of receiptof the complaint from the aggrieved investor;(h)18[(g) the Collective Investment Management Company shall enter into an agreementwith a depository for dematerialization of the units of collective investmentscheme proposed to be issued;all monies payable towards subscription of units of collective investment schemeshall be paid through cheque or demand draft or through any other bankingchannel, but not by cash;the Collective Investment Management Company shall comply with KYC (knowyour client) norms as specified by the Board.](i) |
| 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. |
| 12 (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 . BUSINESS ACTIVITIES AND OBLIGATIONS OF COLLECTIVE |
| 13 The Collective Investment Management Company shall not :a) undertake any activity other than that of managing the 19[collective investmentscheme];b) act as a trustee of any 20[collective investment scheme];c) launch any 21 [collective investment scheme] for the purpose of investing insecurities; invest in any 22[collective investment scheme] floated by it.Provided that a Collective Investment Management Company may invest in itsown 23[collective investment scheme],(i) if it makes a disclosure of its intention to invest in the offer document of the 24[collectiveinvestment scheme], and |
| 14 Every Collective Investment Management Company shall:(a) be responsible for managing the funds or properties of the 26[collective investment scheme]on behalf of the unit holders;(b) take all reasonable steps and exercise due diligence to ensure that the 27[collective investmentscheme] is managed in accordance with the provisions of these regulations, offer document andthe trust deed;(c) exercise due diligence and care in managing assets and funds of the 28[collective investmentscheme];(d) be responsible for the acts of commissions and omissions by its employees or the personswhose services have been availed by it;(e) remain liable to the unit holders for its acts of commission or omissions, notwithstandinganything contained in any contract or agreement;(f) be incompetent to enter into any transaction with or through its associates, or their relativesrelating to the 29[collective investment scheme]:Provided that in case the Collective Investment Management Company enters into anytransactions relating to the 30[collective investment scheme] with any of its associates, a report tothat 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 31[collective investmentscheme] at least twice in every three months; (k) ensure that its officers or employees do not make improper use of their position orinformation to gain, directly or indirectly, an advantage for themselves or for any other person orto cause detriment to the 32[collective investment scheme];(l) obtain adequate insurance against the property of the 33[collective investment scheme]; |
| 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. |
| 15 (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 daysof their appointment; and(b) any change in the interests of directors, within fifteen days of such change. |
| 15 (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 . |
| 15 (4) The Collective Investment Management Company shall furnish to the Board and the trustee |
| 16 (1) A 35[collective investment 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 32 ibid. 33 ibid. 34 ibid. 35 ibid. |
| 16 (2) A Collective Investment Management Company shall appoint a trustee who shall hold the assets of the 36[collective investment scheme] for the benefit of unit holders. |
| 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. |
| 17 (2) No trust deed shall contain a clause which has the effect of (i) limiting or extinguishing the obligations and liabilities of the Collective InvestmentManagement Company in relation to any 37[collective investment scheme] or the unit holders; or(ii) indemnifying the trustee or the Collective Investment Management Company for loss ordamage caused to the unit holders by their acts of negligence or acts of commissions oromissions. |
| 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 managementcompany. |
| 18 (2) The Collective Investment Management Company shall furnish to the Board particulars as |
| 19 No person shall be appointed as trustee of a 38[collective investment 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 againstsuch person, an order under the Act for violation of any provision of the Act or of regulationsmade hereunder. |
| 20 (1) The trustee and the Collective Investment Management company shall enter into an agreement for managing the 39[collective investment scheme] property. |
| 20 (2) The agreement for managing the 40[collective investment 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 41[collective investment scheme]. 36 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.37 ibid.38 ibid.39 ibid. |
| 21 (1) The trustee shall have a right: (a) to obtain from the Collective Investment Management Company such information as isconsidered necessary by the trustee.(b) to inspect the books of account and other records relating to the 42[collective investmentscheme]. |
| 21 (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 43[collective investment scheme] andsubmitted their bio-data which shall contain the educational qualifications and past experience inthe areas relevantfor fulfilling the objectives of the 44[collective investment scheme]s;(c) appointed auditors to audit the accounts of the 45[collective investment scheme] from the listof auditors approved by the Board;(d) appointed a compliance officer to comply with the provisions of the Act and these regulationsand 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 internalaudit systems;(g) taken adequate insurance for the assets of the 46[collective investment scheme];(h) not given any undue or unfair advantage to any associates of the company or dealt with anyof the associates in any manner detrimental to the interest of the unit holders;(i) operated the 47[collective investment scheme] in accordance with the provisions of the trustdeed, these regulations and the offer document of the 48[collective investment scheme](s);(j) undertaken the activity of managing 49[collective investment scheme]s only;(k) taken adequate steps to ensure that the interest of investor s of one 50[collective investmentscheme] are not compromised with the object of promoting the interest of investor s of any other51[collective investment scheme];40 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.41 ibid.42 ibid.43 ibid.44 ibid.45 ibid.46 ibid.47 ibid.48 ibid.49 ibid.50 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.51 ibid.(l) minimum networth on a continuous basis and shall inform the Board immediately of anyshortfall;(m) been diligent in empanelling the marketing agents and in monitoring their activities. |
| 21 (3) Where the trustee has reason to believe that the conduct of business of the 52[collective investment scheme] is not in accordance with these regulations, trust deed and the offer document of the 53[collective investment scheme], the trustee shall forthwith take such remedial steps as are necessary and shall immediately inform the Board of the action taken. |
| 21 (4) The trustee shall be accountable for, and be the custodian of, the funds and property of the respective 54[collective investment scheme]s 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. |
| 21 (5) The trustee shall be responsible for the calculation of any income due to be paid to the 55[collective investment scheme] and also for any income received in the 56[collective investment scheme] to the unit holders. |
| 21 (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 unitholders holding at least one-tenthof nominal value of the unit capital of any 57[collective investment scheme]; or(c) when any changeinvestmentscheme]Provided that no such change shall be carried out unless the consent of unit holdersholding at least three-fourths of nominal value of the unit capital of the 59[collective investmentscheme] is obtained.objective and terms of a 60[collective investment scheme]. |
| 21 (7) The trustee shall review :( a) on a quarterly basis (i.e., by the end of March, June, September and December) every year allactivities carried out by the Collective Investment Management Company;(b) periodically all service contracts relating to registrars to an issue and share transfer agentsand 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 InvestmentManagement Company. |
| 21 (8) (i) The trustee shall ensure that: (a) net worth of Collective Investment Management Company is not deployed in a manner whichis detrimental to interest of unit holders;(b) property of each 61 [collective investment scheme] is clearly identifiable as 62 [collectiveinvestment scheme] property and held separately from property of the Collective InvestmentManagement Company and property of any other 63[collective investment scheme];the fundamental attributes of any 58 [collectivein52 ibid.53 ibid.54 ibid..55 ibid.56 ibid..57 ibid.58 ibid.59 ibid.60 ibid.(c) clearances or no objection certificate is obtained, in respect of transactions relating toproperty of the 64[collective investment scheme] from such authority as is competent to grantsuch clearance or no objection certificate.(ii) The trustee shall abide by the Code of Conduct as specified in the Third Schedule. |
| 21 (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 65[collective investment scheme];(b) a certificate stating that the trustee has satisfied himself that affairs of the CollectiveInvestment Management Company and of the various 66 [collective investment scheme]s areconducted in accordance with these regulations and investment objective of each 67[collectiveinvestment scheme]. |
| 21 (10) The trustee shall cause: (a) the profit and loss accounts and balance sheet of the 68[collective investment scheme]s to beaudited at the end of each financial year by an auditor empanelled with the Board.(b) each 69[collective investment scheme] to be appraised at the end of each financial year by anappraising agency.(c) 70[collective investment scheme] rated by a credit rating agency. |
| 21 (11) A meeting of the trustees to discuss the affairs of the 71[collective investment scheme] shall be held at least twice in every three months in a financial year. |
| 21 (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. |
| 21 (13) The trustee shall ensure that (a) the fees and expenses of the 72 [collective investment scheme] are within the limits asspecified in Part I of the Ninth Schedule;(b) accounts of the 73[collective investment scheme]s are drawn up in accordance with theaccounting norms as specified in Part II of the Ninth Schedule.(c) accounts of the 74[collective investment scheme] comply with the format of the balance sheetand the profit and loss account as specified in Part II I of the Ninth Schedule.61 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.62 ibid.63 ibid.64 ibid.65 ibid.66 ibid.67 ibid.68 ibid.69 ibid.70 ibid.71 ibid.72 ibid.73 ibid.74 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014. |
| 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 the75 [collective investment scheme] pass a resolution for removing the trustee and the Boardapproves such resolution; or(d) if in the interest of the unit holders, the Board, for reasons to be recorded in writing decidesto remove the trustee for any violation of the Act or these regulations committed by them; orProvided that the trustee shall be afforded reasonable opportunity of hearing before action istaken under this clause;(e) if the trustee serves on the Collective Investment Management Company a notice of not lessthan three months expressing its intention not to continue as trustee. |
| 22 (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. |
| 22 (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. |
| 22 (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). |
| 22 (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. |
| 22 (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 76[collective investment scheme]. |
| 22 (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 theregulations. |
| 22 (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 suchremoval. |
| 23 (1) The agreement referred to in regulation 20 entered into by the trustee with the Collective Investment Management Company may be terminated 75 ibid. 76 ibid.(a) if the Collective Investment Management Company is in the course of being wound up as perthe 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 the77 [collective investment scheme] pass a resolution for terminating the agreement with theCollective Investment Management Company and the prior approval of the Board has beenobtained; or(c) if in the interest of the unit holders the Board or the trustee, after obtaining prior approval ofthe Board, and after giving an opportunity of being heard to the Collective InvestmentManagement Company , decide to terminate the agreement with the Collective InvestmentManagement Company. |
| 23 (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 suchtermination. |
| 23 (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 . |
| 23 (4) The Collective Investment Management Company appointed under subregulation (2) shall stand substituted as a party in all the documents to which the Collective Investment Management Company so removed was a party. |
| 23 (5) The Collective Investment Management Company so removed shall continue to be liable for all acts of omission and commissions notwithstanding such termination. |
| 23 (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 78 [collective investment scheme]. |
| 23 (7) An agreement for managing 79[collective investment scheme] property shall be executed in |
| 24 (1) No 82[collective investment scheme] shall be launched by the Collective Investment Management Company unless such 83[collective investment scheme] is approved by the Trustee. Rating |
| 24 (2) No 84 [collective investment scheme] shall be launched by the Collective Investment Management Company without obtaining rating from a credit rating agency. Appraisal |
| 24 (3) No 85 [collective investment scheme] shall be launched by the Collective Investment Management Company without getting the 86[collective investment scheme] appraised by an appraising agency. Close ended 87[collective investment scheme] and 88[collective investment scheme] duration |
| 24 (4) Collective Investment Management Company shall: (a) launch only close ended 89[collective investment scheme]s;(b) the duration of the 90[collective investment scheme]s shall not be of less than three calendaryears.Insurance |
| 25 No 92[collective investment scheme] shall provide guaranteed or assured returns. 80 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014. Provided that indicative return may be indicated in the offer document only, if the same isassessed by the appraising agency and expressed in monetary terms. |
| 26 (1) The Collective Investment Management Company shall before launching any 93[collective investment scheme] file a copy of the offer document of the 94[collective investment scheme] as referred to in sub-regulation (1) of regulation 24 with the Board and pay filing fees as specified in the Second Schedule. |
| 26 (2) The offer document shall contain such information as specified in the Sixth Schedule. |
| 26 (3) The offer document shall also contain true and fair view of the 95[collective investment scheme] and adequate disclosures to enable the investors to make informed decision . |
| 26 (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. |
| 26 (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. |
| 27 (1) Advertisements in respect of every 96 [collective investment scheme] shall be in conformity with the Advertisement Code as specified in the Seventh Schedule . |
| 27 (2) The advertisement for each 97[collective investment scheme] shall disclose in addition to the investment objectives, the method and periodicity of valuation of 98 [collective investment scheme] property. |
ii. amendments to the sebi (foreign institutional investors) regulations, 1995the sebi (foreign institutional investors) regulations, 1995 has been amended on may 22, 2008. the key features of the captioned amendment regulations were as under:a)fiis and their sub-accounts shall not issue/renew odis with underlying as derivatives with effect from september 30, 2007. they are required to wind up the current position over 18 months, i.e., before march 31, 2009, during which period sebi will review the position from time to time.b)issuance of odis/pns would be limited to only “regulated” entities and not “registered” entities.c) the fiis who are currently issuing odis with total value of pns outstanding (excluding derivatives) as a percentage of their auc in india of less than 40 per cent shall be allowed to issue further odis only at the incremental rate of 5 per cent of their auc in india. the 5 per cent incremental issuance allowed to such fiis would be applicable on an annual basis, till such time that the percentage reaches 40 per cent, after which the entity will abide by the proposal applicable to entities above the 40 per cent limit.d) those fiis with total value of pns outstanding (excluding derivatives) as a percentage of their auc in india of more than 40 per cent shall issue pns only against cancellation / redemption/ closing out of the existing pns of at least equivalent amount.e)fii and sub-account registrations will be perpetual, subject to payment of fees.95f)the eligibility criteria for registration as a fii have been modified.g) track record of individual fund managers is to be considered for the purpose of ascertaining the track record of a newly set up fund, subject to such fund manager providing its disciplinary track record details.h) university funds, endowments, foundations, charitable trusts and charitable societies can be considered for registration as an fii even though they are not regulated by a foreign regulatory authority.i)j)k)l)broad-based the eligibility criteria for registration as a sub-account has been changed to include fund incorporated or established outside india, proprietary fund of a registered fii or foreign corporate or foreign individual or university funds, endowments, foundations, charitable trusts and charitable societies who are eligible to be registered as an fii.the “broad-based” criteria have been modified to include entities having at least 20 investors, no single investor holding more than 49 per cent (instead of 10 per cent at present).in order to streamline the process of registration, the application forms for grant of registration as a fii and sub account have been modified.an asset management company, investment manager or advisor or an institutional portfolio manager set up and/ or owned by non resident indians (nris) shall be eligible to be registered as fii subject to the condition that they shall not invest their proprietary funds. this has been enabled by suitable modification to explanation ii under regulation 13 of the sebi (fii) regulations. annual report 2008-09m) the type of securities in which fiis are permitted to invest has been widened to include schemes floated by a collective investment scheme. |
| 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 92 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014, |
| 29 (1) The offer document and advertisement materials shall not be misleading or contain any statement or opinion which are incorrect or false. |
| 29 (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 issueof the offer document ;(ii) who has issued the offer document and shall be punishable under the Act unless he proveseither that the statement or opinion was immaterial or that he had reasonable ground to believe atthe time of the issue of the offer document or advertisement that the statement was true. |
| 30 No collective investment scheme] shall be open for subscription for more than days. |
| 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 100[collectiveinvestment scheme]; and(b) in case of oversubscription the process of allotment of the amount oversubscribed. |
| 31 (2) The Collective Investment Management Company shall refund the application money to the applicants, (i) if the 101[collective investment scheme] fails to receive the minimum subscription amountreferred to in clause (a) of sub-regulation (1). |
| 31 (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. |
| 31 (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 subscriptionlist.Unit certificates99 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.100 ibid. |
| 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 byelaws of the depository . |
| 33 (1) A unit certificate issued under the 102[collective investment scheme] shall be freelytransferable. |
| 33 (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 |
| 34 (1) The subscription amount received shall be kept in a separate bank account in the name of the 103[collective investment scheme] and shall be utilised for (a) adjustment against allotment of units only after the trustee has received a statement from theregistrars to the issue and share transfer agent regarding minimum subscription amount, as statedin 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. |
| 34 (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 104[collective investment scheme] is being launched. |
| 34 (3) The moneys credited to the account of the 105[collective investment scheme] shall be utilised for the purposes of the 106[collective investment scheme] and as specified in the offer document. |
| 34 (4) Any unutilised amount lying in the account of the 107[collective investment scheme] shall be invested in the manner as disclosed in the offer document.w.e.f. 9-1-2014.103 ibid.104 ibid.105 ibid.106 ibid.107 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014. |
| 35 The Collective Investment Management Company shall:(a) not invest the funds of the 108[collective investment scheme] for purposes other than theobjective of the 109[collective investment scheme] as disclosed in the offer document.(b) segregate the 110[collective investment scheme] assets of different s111[collective investmentscheme] s.(c) not invest corpus of a 112[collective investment scheme] in other 113[collective investmentscheme]s.(d) not transfer funds from one 114 [collective investment scheme] to another 115 [collectiveinvestment scheme]:Provided that inter-scheme transfer of 116 [collective investment scheme] property may bepermitted at the time of termination of the 117[collective investment scheme] with prior approvalof the trustee and the Board. |
| 36 The units of every 119[collective investment 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 collective investment scheme on each of the stock exchanges as mentioned in the offer document. |
| 37 (1) A 122[collective investment scheme] shall be wound up on the expiry of duration specified in the 123 [collective investment scheme] or on the accomplishment of the purpose of the collective investment scheme. |
| 37 (2) Notwithstanding anything contained in sub-regulation (1), a 125 [collective investment scheme] may also be wound up (a) on the happening of any event which, in the opinion of the trustee, requires the 126[collectiveinvestment scheme] to be wound up and the prior approval of the Board is obtained; or(b) if unit holders of a 127[collective investment scheme] holding at least three-fourth of thenominal value of the unit capital of the 128[collective investment scheme] pass a resolution thatthe 129[collective investment 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 130[collective investment scheme] isprejudicial to the interests of the unit holders; or(d) if in the opinion of the Collective Investment Management Company, the purpose of the131[collective investment scheme] cannot be accomplished and it obtains the approval of thetrustees and also of the unit holders of the 132[collective investment scheme] holding at leastthree-fourth of the nominal value of the unit capital of the 133[collective investment scheme] witha resolution that the 134[collective investment scheme] be wound up and the approval of theBoard is obtained. |
| 37 (3) Where a 135[collective investment 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 136[collective investment 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. |
| 37 (4)(a) The trustee shall dispose of the assets of the 137[collective investment scheme] concerned in the best interest of the unit holders of that 138[collective investment scheme].(b) The proceeds of sale realised under clause (a), shall be first utilized towards the discharge ofsuch liabilities as are due and payable under the 139[collective investment scheme] and aftermaking appropriate provision for meeting the expenses connected with such winding up, thebalance shall be paid to the unit holders in proportion to their unit holding.125 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.126 ibid.127 ibid.128 ibid.129 ibid.130 ibid.131 ibid.132 ibid.133 ibid.134 ibid.135 ibid.136 ibid.137 ibid.138 ibid.139 ibid. |
| 37 (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 140[collective investment scheme],expenses for winding up and net assets available for distribution to the unit holders, and(b) a certificate from the auditors of the 141[collective investment scheme] to the effect that all theassets of the 142[collective investment scheme] are realised and the details of the distribution ofthe proceeds. |
| 37 (6) The unclaimed money if any at the time of winding up shall be kept separately in a bank |
| 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 143[collective investment scheme] so wound up. |
| 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 145[collective investment scheme] have been |
| 40 (1) Every Collective Investment Management Company shall (a) keep and maintain proper books of account, records and documents, for each 147[collectiveinvestment scheme] so as to explain its transactions and to disclose at any point of time thefinancial position of each 148[collective investment scheme]and in particular give a true and fair view of the state of affairs of the 149[collective investmentscheme], and140 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.141 ibid.142 ibid.143 ibid.144 ibid.145 ibid.146 ibid.147 ibid.148 ibid.(b) intimate to the Board and the trustees the place where such books of account, records anddocuments including computer records are maintained. |
| 40 (2) Every Collective Investment Management Company shall continue to maintain and preserve, |
| 41 The financial year for all the 151[collective investment scheme]s shall end as on March 31 of each year. |
| 42 The Collective Investment Management Company shall,(a) Dispatch to the unit holders the warrants within 42 days of the declaration of the interimreturns.(b) Dispatch the redemption proceeds within 30 days of the closure or the winding up of the |
| 43 (1) The Collective Investment Management Company shall:(a) not exceed the ceilings on expenses or fees in respect of the 153 [collective investmentscheme] as specified in Part I of the Ninth Schedule;(b) prepare the accounts of the 154[collective investment scheme] in accordance with accountingnorms 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 II I ofthe Ninth Schedule. |
| 43 (2) An annual report and annual statement of accounts of each 155[collective investment scheme] shall be prepared in respect of each financial year. |
| 43 (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 Reportw.e.f . 9-1-2014.150 ibid.151 ibid..152 ibid.153 ibid.154 ibid. |
| 44 (1) Every 156[collective investment 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. |
| 44 (2) The auditor shall be appointed by the trustee . |
| 44 (3) The auditor shall forward his report to the trustee and such report shall form part of the Annual Report of the v. |
| 44 (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 andbelief, were necessary for the purpose of the audit;(ii) the balance sheet and the revenue account give a fair and true view of the v, state of affairsand surplus or deficit in the 157[collective investment scheme] for the accounting period to whichthe 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 andstandards 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 the158[collective investment scheme]s. |
| 45 (1) The auditor of the 160[collective investment 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 161[collective investment scheme]s are not conducted on sound commercial principles. |
| 45 (2) The auditor of the 162[collective investment scheme]:(a) shall have a right to access at all reasonable times to the books of the 163 [collectiveinvestment scheme]; and(b) may require any employee of the Collective Investment Management Company to give theauditor information and explanations for the purposes of the audit.Removal or Resignation of auditorsw.e.f. 9-1-2014.157 ibid.158 ibid.159 ibid.160 ibid.161 ibid.162 ibid. |
| 46 (1) The trustee, after prior approval of the trustee and for reasons to be recorded in writing remove the auditor of the v for misconduct or inefficiency after giving the auditor a reasonable opportunity of hearing : Provided that another auditor for the 164[collective investment scheme] is appointed by trustee immediately from auditors empanelled with the Board. |
| 46 (2) The auditor of the 165[collective investment scheme] may resign by giving a three months written notice to the Collective Investment Management Company and to the trustee . |
| 47 (1) The 166[collective investment 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. |
| 47 (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. |
| 47 (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. |
| 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 orsubmit. |
| 48 (2) Without prejudice to the generality of sub-regulation (1), the Collective Investment Management Company on behalf of the 167 [collective investment 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 theprofit and loss account in respect of each 168[collective investment scheme], once a year;(b) a copy of quarterly unaudited accounts;(c) a quarterly statement of changes in net assets for each of the 169 [collective investmentscheme]s.Quarterly disclosuresw.e.f. 9-1-2014.165 ibid.166 ibid.167 ibid.168 ibid. |
| 49 A Collective Investment Management Company, on behalf of the 170[collective investment 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 171[collective investment scheme]. |
| 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. |
| 51 The calling of meeting of unit holders as well as transfer and transmission of units of |
| 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 InvestmentManagement Company in the manner specified in these regulations ;(b) to ascertain whether the provisions of the Act and these regulations are being complied withby the trustee and Collective Investment Management Company;(c) to ascertain whether the systems, procedures and safeguards followed by the CollectiveInvestment Management Company are adequate;(d) to investigate into the complaints received from the investors or any other person on anymatter having a bearing on the activities of the trustee and Collective Investment ManagementCompany.w.e.f. 9-1-2014.171 ibid.172 ibid. |
| 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. |
| 53 (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. |
| 53 (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. |
| 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. |
| 54 (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. |
| 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. 173Action on inspection or investigation report Enquiry Officer and Imposing Penalty) Regulations, 2002. Prior to substitution the regulation 56 |
| 56 The Board or the Chairman shall after consideration of inspection or investigation report take such action as the Board or Chairman may deem fit and appropriate including action under 174Chapter V of the Securities and Exchange Board of India (Intermediaries) Regulations, 2008].] |
| 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 175[collective investment scheme]s : 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 |
| 57 (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. |
| 58 176[***] 177Liability for action in case of default |
| 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 suchcommunication. |
| 56 (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.' by Enquiry Officer and Imposing Penalty) Regulations, 2002' by the SEBI (Intermediaries) Regulations, 2008, w.e.f. 26-05-2008. 175 Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.Penalty) Regulations, 2002, w.e.f. 27-09-2002. |
| 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 misleadingor suppresses any material information;(c) does not co-operate in any inspection, investigation or inquiry conducted by the Board underthe 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 satisfactoryreply 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 178[collective investmentscheme] in a recognized stock exchange, shall be dealt with in the manner provided in |
| 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 any181[collective investment scheme];w.e.f. 9-1-2014.by Enquiry Officer and Imposing Penalty) Regulations, 2002' by the SEBI (Intermediaries)Regulations, 2008, w.e.f. 26-05-02008.and Imposing Penalty) Regulations, 2002, w.e.f. 27-09-2002.w.e.f. 9-1-2014.(b) prohibiting the person concerned from disposing of any of the properties of the 182[collectiveinvestment scheme] acquired in violation of these regulations;(c) requiring the person concerned to dispose of the assets of the 183 [collective investmentscheme] 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 investorsalong with the requisite interest or otherwise, collected under the 184 [collective investmentscheme]; |
| 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. |
| 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. out the obligations undertaken in the various documents entered into with the investors who have subscribed to the 187[collective investment scheme]. |
| 68 (2) An existing collective investment scheme shall make an application to theBoard in the manner specified in regulation 5. |
| 68 (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. |
| 69 No existing collective investment scheme shall launch any new 189[collective investment scheme] or raise money from the investors even under the existing 190[collective investment scheme], unless a certificate of registration is granted to it by the Board under regulation 10. |
| 70 (1) The applicant for the purpose of being considered eligible for the grant of provisional registration shall satisfy the Board that (a) the 191 [collective investment scheme]s of the applicant are in the nature of collectiveinvestment schemes;(b) the affairs of the applicant are not being conducted in a manner detrimental to the interest ofexisting investors;(c) the applicant has at least 50% independent directors at the time of making the application.persons operating the existing collective investment scheme;w.e.f. 9-1-2014.187 ibid.188 ibid.189 ibid.190 ibid.191 ibid.(d) any person, directly or indirectly connected with it has not been granted registration by theBoard under the Act. |
| 70 (2) The Board for the purposes of grant of provisional registration may, inter alia, inspect the 192[collective investment scheme]s, books of account, records and documents of the applicant . |
| 70 (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 193[collective investment scheme]s, books of account, records and documents of the applicant . |
| 70 (4) The Board on being satisfied that the requirements specified in sub-regulation (1) are not |
| 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 195[collective investment scheme]s rated by a credit ratingagency within 196[two] year from the date of grant of provisional registration;(b) the applicant shall get the existing 197[collective investment scheme]s audited by an auditorwithin a period of 198[two] year from the date of grant of provisional registration;(c) the applicant shall get existing 199[collective investment scheme]s appraised by an appraisingagency within a period of 200[two] year from the date of grant of provisional registration;w.e.f. 9-1-2014.193 ibid.194 ibid.195 ibid.and Exchange Board of India (Collective Investment Schemes) (Amendment) Regulations, 2002,w.e.f, 17-01-2002.w.e.f. 9-1-2014.and Exchange Board of India (Collective Investment Schemes) (Amendment) Regulations, 2002,w.e.f, 17-01-2002.w.e.f. 9-1-2014.and Exchange Board of India (Collective Investment Schemes) (Amendment) Regulations, 2002,w.e.f, 17-01-2002.(d) the applicant shall create a trust and appoint trustees in the manner specified in Chapter IV ofthese regulations within a period of 201 [ two] years from the date of grant of provisionalregistration;(e) the applicant shall comply with accounting and valuation norms in respect of 202[collectiveinvestment scheme]s floated before the commencement of these regulations as specified in PartII of the Ninth Schedule within a period of 203[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 thedate of grant of provisional registration which shall be increased by Rupees one crore eachwithin two years, three years, four years and five years from the date of grant of provisionalregistration;(g) the applicant shall not dispose of the 204[collective investment scheme] property except formeeting obligations arising under the offer document of the 205[collective investment scheme];(h) the applicant shall comply with the conditions specified in regulation 11;(i) such other conditions which the Board may impose. |
| 71 (2) The applicant shall give a written undertaking to the Board to comply with the conditions |
| 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 201 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.w.e.f. 9-1-2014.and Exchange Board of India (Collective Investment Schemes) (Amendment) Regulations, 2002,w.e.f, 17-01-2002.w.e.f. 9-1-2014.205 ibid.206 ibid.207 ibid.fulfilled, shall be granted a certificate of registration under regulation 10 upon payment ofregistration fees as specified in paragraph 2 of the Second Schedule and on such terms andconditions as may be specified by the Board. |
| 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 209[collective investment scheme]. |
| 73 (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 210[collective investment scheme]s, within two months from the date of receipt of intimation from the Board, detailing the state of affairs of the 211[collective investment scheme], the amount repayable to each investor and the manner in which such amount is determined. |
| 73 (3) The information memorandum referred to in sub-regulation (2) shall be dated and signed by all the directors of the 212[collective investment scheme]. |
| 73 (4) The Board may specify such other disclosures to be made in the information memorandum, as it deems fit. |
| 73 (5) The information memorandum shall be sent to the investors within one week from the date of the information memorandum . |
| 73 (6) The information memorandum shall explicitly state that investors desirous of continuing with the 213[collective investment scheme] shall have to give a positive consent within one month from the date of the information memorandum to continue with the 214[collective investment scheme] |
| 73 (7) The investors who give positive consent under sub-regulation (6), shall continue with the 215[collective investment scheme] at their risk and responsibility : Provided that if the positive consent to continue with the 216[collective investment scheme], is received from only twenty-five per cent or less of the total number of existing investors, the 217[collective investment scheme] shall be wound up. |
| 73 (8) The payment to the investors, shall be made within three months of the date of the information memorandum. |
| 73 (9) On completion of the winding up, the existing collective investment scheme shall file with |
| 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 |
| 74A (1) Any person who has been operating a scheme or arrangement deemed to be a collective investment scheme under the proviso to sub-section (1) of section 11AA of the Act at the time of commencement of the Securities and Exchange Board of India (Collective Investment Schemes) (Amendment) Regulations, 2014, shall be deemed to be an existing collective investment scheme and shall also comply with the provisions of Chapter IX: Provided that any scheme or arrangement which is otherwise regulated or prohibited under any other law shall not be deemed to be a collective investment scheme. investment scheme’ shall include carrying out the obligations undertaken in the various documents entered into with the investors who have subscribed to the scheme or arrangement. |
| 74A (2) An existing collective investment scheme shall make an application to the Board in the manner specified in regulation 5.]w.e.f. 9-1-2014.216 ibid.217 ibid.218 ibid. |
| 74B (1) The Board may, exempt any person or class of persons from the operation of all or any of the provisions of these regulations for a period as may be specified but not exceeding twelve months, for furthering innovation in technological aspects relating to testing new products, processes, services, business models, etc. in live environment of regulatory sandbox in the securities markets . |
| 74B (2) Any exemption granted by the Board under sub-regulation (1) shall be subject to the applicant satisfying such conditions as may be specified by the Board including conditions to be complied with on a continuous basis. environment where new products, processes, services, business models, etc. may be deployed on a limited set of eligible customers for a specified period of time, for furthering innovation in the |
| 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 |