Mutual fund regulatory environment

REGULATORS IN INDIA

· SEBI – The capital markets regulators also regulates the mutual funds in India. SEBI requires all mutual funds to be registered with them. SEBI issues guidelines for all mutual funds operations – investment, accounts, expenses etc.

· RBI as supervisor of banks owned mutual funds – As banks in India came under the regulatory jurisdiction of RBI, bank owned funds to be under supervision of RBI and SEBI.

· RBI as supervisor of Money Market Mutual Funds – RBI has supervisory responsibility over all entities that operate in the money markets. Hence in the past Money Market Mutual Funds scheme of Mutual funds had to be abide by policies laid down by RBI.

· Ministry of Finance – (M o F) supervises both the RBI & the SEBI and plays the role of apex authority for any major disputes over SEBI guidelines.

· Company Law Board – Dept of Company Affairs – Registrar of companies AMCs of Mutual funds are companies registered under the companies Act 1956 and therefore answerable to regulatory authorities empowered by the Companies Act.

· Stock Exchanges

Stock Exchanges are self-regulatory organizations supervised by SEBI. Many of closed ended funds of AMCs are listed as stock exchanges and are traded like shares

· Office of the Public Trustee

Mutual fund being public trust are governed by the Indian Trust Act 1882. The Board of trustees or the Trustee Company is accountable to the office of the public trustee, which in turn reports to the Charity commissioner

· Unit Trust of India

Unit Trust of India formed under UTI Act 1963.The Management of the Trust is under a Board of trustees, which has names of RBI, IDBI, LIC, SBI with the chairman appointed by the Government of India in consultation with the IDBI.

· What are Self-Regulatory organizations?

A Self Regulatory organization (SRO) is an association representing a group of market participants, which is empowered by the apex regulatory authority to exercise pre-defined authority over regulation of their members.