gagan pareek mutual fund structure

8/9/2019 Gagan Pareek Mutual Fund Structure

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08/31/10 Welingkar Inst of Management and Development 1

STRUCTURE RELIANCE

MUTUAL FUND

By

Gagan PareekParvez

Rangwala SainatthWagh


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Mutual Fund ?

A mutual fund is a company that poolsmoney from many investors and invests themoney in stocks, bonds, short-term money-

market instruments, other securities or assets, orsome combination of these investments. Thecombined holdings the mutual fund owns areknown as its portfolio. Each share represents aninvestor's proportionate ownership of the fund's

holdings and the income those holdings generate


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Reliance Mutual Fund

India s leading Mutual Fund : , ,Average Assets under Management 1 02 179 Cr :Investor Count 73 Lakh Folios Presence in 159 Cities across country ,14 years of ext

ensive market experience 35schemes combined with a strong performance

.track record- ,AMFI Website

2010


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Constitution andManagement


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47 Funds RCAM

Reliance Growth Fund

(September 1995)Reliance Vision Fund (September1995)

Reliance Fixed Horizon Fund VI(December 2007)

Reliance Liquidity Fund (June2005)

Reliance Income Fund (December1997)

Reliance Liquid Fund (March1998)

Reliance Fixed Horizon Fund VII(January 2008)

Reliance Interval Fund (March2007)

Reliance Medium Term Fund

(August 2000)Reliance Short Term Fund(December 2002)

Reliance Fixed Horizon Fund IX(March 2008)

Reliance Equity Advantage Fund(June 2007)

Reliance Fixed Term Scheme(March 2003)

Reliance Banking Fund (May2003)

Reliance Fixed Horizon Fund X(August 2008)

Reliance Fixed Horizon Fund V(September 2007)

Reliance Gilt Securities Fund

(July 2003)Reliance Diversified Power SectorFund (March 2004)

Reliance Fixed Horizon Fund XII(November 2008)

Reliance Fixed Horizon Fund IV(August 2007)

Reliance Monthly Income Plan(December 2003)

Reliance Floating Rate Fund(August 2004)

Reliance InfrasReliance EquityLinked Saving Fund - Series I(December 2007)

Reliance Fixed Horizon Fund(April 2006)

Reliance Pharma Fund ( May2004)

Reliance NRI Equity Fund(October 2004)

Reliance Natural Resources Fund(January 2008)

Reliance Fixed Horizon Fund II( November 2006)

Reliance Media & EntertainmentFund (September 2004)

Reliance Index Fund (February2005)*

Reliance Fixed Horizon Fund VIII(March 2008)

Reliance Long Term Equity Fund(November 2006)

Reliance NRI Income Fund(October 2004)

Reliance Fixed Maturity Fund Series I (March 2005)

Reliance Banking ExchangeTraded Fund (May 2008)

Reliance Equity Fund (February2006)

Reliance Equity Opportunities

Fund (February 2005)

Reliance Regular Savings Fund

(May 2005)

Reliance Fixed Horizon Fund XI

(October 2008)tructure Fund(June 2009)

Reliance Fixed Tenor Fund

(November 2005)

Reliance Fixed Maturity Fund Series II (April 2005)

Reliance Tax Saver (ELSS) Fund(July 2005)

Reliance Gold Exchange TradedFund (October 2007)

Reliance Fixed Horizon Fund I(August 2006)

Reliance Fixed Horizon Fund III(March 2007)

Reliance Money Manager Fund(March 2007)


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Trustee:egistered Office :orporate Office

, ,EO1 Reliance Greens,Village Motikhavdi

. . ,P O Digvijaygram-District Jamnagar

361140( )GUJARAT

( &Express Building 4th 6th),Floor

, , ,14 'E' Road Churchgate. ,Opp Churchgate Station

.Mumbai 400 020. ,Tel 022 3041 4800

Reliance Capital Trustee Co. Limited (RCTC), acompany incorporated under the CompaniesAct, 1956, has been appointed as the Trusteeto the Fund vide the Trust Deed dated April 25,1995 executed between the Sponsor and the

Trustee. RCTC has been appointed as the Trustee to

Reliance India Power Fund, a Venture CapitalFund registered with the SEBI vide registrationnumber IN/VCF/05-06/062 dated June 16, 2005

An application has also been filed for registration of

Reliance Venture Capital Fund with SEBI.

A M C:egistered Office :orporate Office, ,EO1 Reliance Greens

,Village Motikhavdi. . ,P O Digvijaygram

-District Jamnagar361140( )GUJARAT

( &Express Building 4th 6th),Floor

, , ,14 'E' Road Churchgate. ,Opp Churchgate Station

.Mumbai 400 020. ,Tel 022 3041 4800


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Bankers to RCAM

ABN Amro BankAxis Bank . .Citibank N ADeutsche Bank AGDevelopment Bank of SingaporeHDFC Bank Limited

HSBC BankICICI Bank LimitedIDBI BankIng Vysya BankKotak Mahindra BankState Bank of India

Standard Chartered BankYes Bank


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Structure of AMC

B

oard

of

Director

s


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Role of AMC

Transparency

Liquidity

Flexibility

Repatriation Decision Making

Valuation

Drafting of Structure of Scheme


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Duties and Obligations ofthe AMC

CEO of AMC ensures fundcomplies with SEBI norms andinvestments made are innorms of Fund objectives as inOD

Investment decisions made in

interest of unit holders. Fund Managers ensure that

investments are made in theinterest of Unit holders and asper the norms and objectivesof FOD

AMC shall not utilize the servicesof Sponsor for purchase of newsecurities

AMC reports data to both SEBIand Trustees.

The RCAM shall not invest in anyof its schemes unless full

disclosure of its intention toinvest has been made in the

Decision are taken by teamcomprising of

Fund Managers

Chief Executive Officer

Investment Committee

Based on

Research Report

Market Intelligence

Analysis of Macro andMicro economic

indicators Market Trends


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IMA and Duties of RCAM

a) RCAM will be responsible for making,floating, issuing Schemes for the Trustafter approval of the same by the

Trustees and SEBI as well as investingand managing the funds mobilizedunder various Schemes, in accordancewith the provisions of the Trust Deed

and SEBI Regulations.b) RCAM must disclose the basis of

calculating the repurchase/redemptionprice and Net Asset Value of thevarious Schemes of the Fund to theinvestors, at such intervals as may bespecified by SEBI and/or the Trusteesand in accordance with the SEBIRegulations.

c) RCAM must maintain books and recordsabout the operation of various

Schemes of the Fund to ensurecompliance with the Regulations andguidelines for Mutual Funds as may beissued by SEBI from time to time, and

shall submit a Scheme wise quarterlyreport on functioning of the Fund to

d) RCAM shall exercise all due diligenceand vigilance in carrying out its dutiesand in protecting the rights andinterest of the

unit holders.e) RCAM will at all times ensure that the

Trust Fund is segregated from assetsof RCAM and assets of any other fundsfor which RCAM is responsible.

f) RCAM shall submit to the Trustee allinformation concerning the operationof the various Schemes of the Fundmanaged by RCAM at such intervalsand in such manner as required by the

Trustee to ensure that RCAM iscomplying with the provisions of the

Trust Deed and SEBI Regulations.


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M a in O b je ctiv e o f Tru st

To carry on the activity of a Mutual Fund as may bepermitted by law and formulate and devise variouscollective Schemes of savings and investments forpeople in India and abroad and also ensure liquidity ofinvestments for the Unit holders

To deploy Funds thus raised so as to help the Unit holdersearn reasonable returns on their Savings

To take such steps as may be necessary from time to timeto realize the effects without any limitation.


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Duties and Obligations of theTrustees

Trustee main duties before Fund Launch:

1 Systems in place for its back office, dealing room and accounting

2 Appointed all key personnel including fund manager(s) for the Scheme(s)and submitted their bio-data which shall contain the educationalqualifications, past experience in the securities market to SEBI, within15 days of their appointment;

(iii) Appointed Auditors to audit its accounts;(iv) Appointed a Compliance Officer to comply with regulatory requirement

and to redress investor grievances;(v) Appointed Registrars and laid down parameters for their supervision;(vi) Prepared a compliance manual and designed internal control

mechanisms including internal audit systems; and(vii) Specified norms for empanelment of brokers and marketing agents.The Trustees shall obtain the consent of the unit holders of the Scheme:(i) Whenever required to do so by SEBI in the interest of the unit holders;(ii) Whenever required to do so, on the requisition made by three-fourths of

the unit holders of any Scheme under the Mutual Fund;(iii) When the majority of the Trustees decide to wind up the Scheme or

prematurely redeem the Units;


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Duties and Obligations of theTrustees

1. Trust Deed

2. Right to Obtain Information from AMC

3. Monitors broker and AMC transactions

4. Ensures AMC works as per SEBI regulations, 1996

5. Informs SEBI for 1 Lac Plus transactions

6. Informs Unit holders and SEBI for change in structure and load if situationdemands change

1. Unit holders are given a option to Exit

2. Change is advertised in Leading Newspaper

7. Periodically review service contracts like Custodian documents

8. Periodically Review Customer Complaints and Review.

9. Appoint Statutory Auditors and have one Independent Director10.Due Diligence

11.Signs the IMA with the AMC

12.Keeps a check on Vacant Positions and nominates individual.

13.Prescribe and adhere to a code of ethics by the Trustees, AssetManagement Company and its personnel.


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T h e C u sto d ia n

Trustee has appointed Deutsche Bank as Custodian

Duties of Custodian: Provide post-trading and custodial services to the Mutual

Fund; Keep securities and other instruments belonging to the

Scheme in safe custody;

Ensure smooth inflow/outflow of securities and such otherinstruments as and when necessary, in the bestinterests of the unit holders

Be responsible for loss of or damage to the securities dueto negligence on its part or on the part of its approvedagents.

The Custodian will charge the Mutual Fund, portfolio fee,transaction fee and out-of -pocket expenses in

accordance with the terms of the Custody Agreementand as per any modification made thereof from time to


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THE REGISTRAR

/ . .R C A M h as ap p oin ted M s K arvy C om p u tersh are Pvt Lim ited A s R e g istra r to th e S ch e m e K C PL w ill

a cce p t a n d p ro ce ss in ve sto r'sa p p lica tio n s

h a n d le co m m u n ica tio n s w ith in ve sto rs p e rfo rm d a ta e n try service s D isp a tch A cco u n t S ta te m e n ts ,o th e r fu n ction s as ag re ed on an on g oin g

.b a sis

T h e R e g istra r is re sp o n sib le fo r ca rryin g o u t d ilig e n tly th efu n ctio n s o f a R e g istra ra n d Tra n sfe r A g e n t a n d w ill b e p a id fe e s a s se t o u t in th e

a g re e m e n t e n te re d in tow ith it a n d a s p e r a n y m o d ifica tio n m a d e th e re o f fro m tim e to.tim e


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// Welingkar Inst of Management and Development

Fees

:MC Fees In te rm s of th e In ve stm en t M an ag e m en t A g ree m en t,and the Regulations the AMC is entitled to a management and

. %advisory fee at the rate of 1 25 of the average daily net assets. . %for net assets up to Rs 100 crore and at the rate of 1 00 for the

. . -net assets in excess of Rs 100 crore For Schemes launched on a No,Load basis the AMC is entitled to collect and additional

%management fee of up to 1 of the average net assets outstandingin each financial year and the total management fee shall not( ) .exceed the limit stated under the Regulation 52 6 of SEBI

:rust Fees ,Pursuant to the Trust Deed constituting the Fund the, ,Fund is authorized to pay the Trustee a fee for their services in

, ,addition to the reimbursement of all costs charges and expenses. % ,sum computed at the rate of 0 05 of the amount being the

aggregate of the Trust Fund and Unit Capital of all the Schemes.put together on 1st April each year or a sum of Rs 5,Lacs which ever is lower or such other sum as may be agreed upon

.between the Settler and the Trustee from time to time The Trusteemay charge further fees as permitted from time to time under the

.Trust Deed and the Regulations


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Sponsor Loss Protection

RCL contributes Rupees One Lac as theinitial contribution to the corpus for the

.setting up of the Mutual Fund RCL is responsible for discharging its

functions and responsibilities towards theFund in accordance with the SEBI.Regulations

The Sponsor is not responsible or liable forany loss resulting from the operation of

the Scheme beyond the contribution of anamount of Rupees one lakh made by themtowards the initial corpus for setting up

the Fund and such other accretion andadditions to the corpus


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Duties and Obligations ofInvestor

Study of Offer Document

In case of dividend declaration, investors have a right to receivethe dividend within 30 days of declaration

On redemption request by investors, the AMC must dispatch theredemption proceeds within 10 working days of the request.

Investors can obtain relevant information from the trustees andinspect documents like trust deed, investment managementagreement, annual reports, offer documents, etc. They mustreceive audited annual reports within 6 months from thefinancial year end.

Investors have a right to be informed about changes in thefundamental attributes of a scheme. Fundamental attributes

include type of scheme, investment objectives and policies andterms of issue.

Investors can approach the investor relations officer for grievanceredressal


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Mutual Fund Cycle


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MUTUAL FUND OPEARATION

P R O D U C TD E S IG N

P R O D U C TM A R K E TIN G

FU N DM A N A G EM EN T

O U TS O U R C IN G

IN V E S TO R SS E R V IC E

THE CHAIN OFOPERATION


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MUTUAL FUND OPERATION

P R O D U C TD E S G ININ N O V A T IO N

S U PE R IO RD E S IG NA D A PATA B ILIT Y

PR O D U C T M A R K ET IN GC O S T A G G R ES SIV EM A R K E TIN G U PFR O N T C O ST

FU N D M A N A G EM EN T C A PITA LPR O T E C T IO N

M A R K E T T IM IN G A S SE T Q U A LITY

O U TS O U R C IN G

C O S T

C O N T R O LFL E X IB ILIT YC H O IC E

IN V ES TO R SE R V IC E

C U S T O M E R

FO C U S B E T T E RC O N FID E N C E E FF IC IE N TS E R V IC E


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TYPES OF MUTUAL FUNDS


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gagan pareek mutual fund structure

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