6134emfs module iii c

7/27/2019 6134emfs Module III c

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Role & Responsibility of Asset Management Company

TheThe AMCAMC hashas toto filefile detailsdetails ofof itsits directorsdirectors andand

transactionstransactions withwith sponsor/associatesponsor/associate companies,companies,

withwith thethe trustees/SEBItrustees/SEBI.. TheThe AMCsAMCs areare prohibitedprohibited fromfrom appointingappointing asas aa

keykey personnel,personnel, anyany personperson foundfound guiltyguilty ofof anyany

economiceconomic offenceoffence oror involvedinvolved inin aa violationviolation ofof

securitiessecurities lawslaws..


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EveryEvery AMCAMC isis requiredrequired toto keep,keep, maintainmaintain andand preservepreserve

properproper booksbooks ofof accounts/records/accounts/records/ documentsdocuments forfor 88

years,years, forfor eacheach schemescheme..

ItIt shouldshould followfollow thethe specifiedspecified accountingaccounting policiespolicies andand

standardsstandards soso asas toto provideprovide thethe appropriateappropriate detailsdetails ofof

thethe schemewiseschemewise dispositiondisposition ofof thethe assetsassets atat thethe

relevantrelevant accountingaccounting datedate andand thethe performanceperformance duringduring

thethe period,period, togethertogether withwith informationinformation regardingregarding thethe

distributiondistribution andand accumulationaccumulation ofof thethe incomeincome accruingaccruing

toto thethe unitholdersunitholders,, inin aa fairfair andand truetrue mannermanner..


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Role & Responsibility of Asset Management Company AllAll expensesexpenses shouldshould bebe clearlyclearly identifiedidentified andand appropriatedappropriated

inin thethe individualindividual schemesschemes..

TheThe AMCAMC maymay chargecharge thethe mutualmutual fundfund withwith investmentinvestment andand

advisoryadvisory fees,fees, whichwhich shouldshould bebe fullyfully discloseddisclosed inin thethe offerofferdocumentdocument..

AllAll otherother expensesexpenses wouldwould bebe borneborne byby thethe

AMC/trustees/sponsorAMC/trustees/sponsor..

InitialInitial issueissue expensesexpenses ofof floatingfloating aa schemescheme cannotcannot exceedexceed 66

perper centcent of of thethe initialinitial resourcesresources raisedraised andand mustmust bebe

accountedaccounted inin thethe booksbooks ofof accountaccount ofof thethe schemescheme..


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Role & Responsibility of Asset Management Company AnAn AMCAMC cancan launchlaunch aa mutualmutual fundfund schemescheme afterafter itsits

approvalapproval byby thethe trusteestrustees andand filingfiling ofof thethe offeroffer documentdocumentwithwith thethe SEBISEBI..

TheThe offeroffer documentdocument shouldshould containcontain adequateadequate disclosuresdisclosurestoto enableenable thethe investorsinvestors toto makemake anan informedinformed investmentinvestmentdecisiondecision..

AllAll advertisementsadvertisements pertainingpertaining toto mutualmutual fundfund schemesschemesshouldshould conformconform toto thethe advertisementadvertisement codecode specifiedspecified byby

SEBISEBI.. TheThe advertisementadvertisement shouldshould alsoalso disclosedisclose thetheinvestmentinvestment objectiveobjective ofof thethe schemescheme.. TheThe offeroffer documentdocumentandand advertisementadvertisement materialsmaterials shouldshould notnot bebe misleadingmisleading ororcontaincontain incorrect/falseincorrect/false informationinformation..


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AnAn AMCAMC maymay launchlaunch schemesschemes onon aa 'load''load' oror 'partial'partial

load'load' basisbasis..

InIn casecase of of aa nono loadload scheme,scheme, thethe initialinitial issueissueexpensesexpenses shouldshould bebe borneborne byby thethe AMCAMC..

InIn aa partialpartial loadload schemescheme aa partpart ofof thethe loadload wouldwould bebe

borneborne byby thethe AMCAMC andand thethe balancebalance byby thethe schemescheme..

InIn aa loadload scheme,scheme, thethe entireentire expenseexpense wouldwould bebe

borneborne byby thethe schemescheme..


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Role & Responsibility of Registrars

The AMC if so authorized by the Trust Deed,appoints the Registrar and Transfer Agent to the

Mutual Fund. The Registrar processes the application forms,

redemption requests and dispatches accountstatements to the unit holders.

The Registrar and Transfer agent also handlescommunications with investors and updatesinvestor records.


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Fund Structure of Birla Sun LifeName of the Mutual Fund :Birla Sun Life MutualFund

Name(s) of Sponsor :Aditya Birla Nuvo Ltd.& Sun Life (India) AMC Investments Inc.

Name of Trustee Company :Birla Sun Life Trustee

Company Private Limited


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Fund Structure of Birla Sun LifeName of the Custodian : J.P. Morgan Chase

Bank, Mumbai, registered with SEBI under

registration number IN/CUS/014Name of the Registrar : Computer Age

Management Services Pvt. Ltd. (CAMS),

Chennai


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Sales Distribution ChannelsEssentials of a Good Distribution System Careful product selection

Careful selection of internal sales staff

Right targeting of customers - a properly graded

Geographical strategy based on a demographicstudy

Proper training of sales staff

Educating / counseling the customer aboutproducts,

After sales servicing


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Sales Distribution ChannelsDirect Selling Direct selling is the least significant element

today. Normally, only very big ticket items aredone through this channel

Alternatively, it derives its inflows mainly fromonline sales.

However, recently this channel is getting afillip.

MFs are gearing up by opening their ownoffices in more places.


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Sales Distribution ChannelsOrganised Distributors

Organised distributors are the backbone of MFdistribution.

They have infrastructure and flexibility to adapt to theneed of the hour.

They too have realized the importance of going tosmaller centers and are establishing offices in urban

and semi-urban locations. This is the channel which needs to be nurtured to

expand


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Sales Distribution ChannelsBanks as Distributors

Banks are emerging as a key distribution channel as they have

huge potential to build and improve the retail segment

There are two major types of bank distributors :

Banks which handle wealth management of their clients and,

on their behalf, manage portfolios wherein investment in mutual

funds is one asset class.

Such banks have sophisticated wealth management practiceswith qualified staff and well-heeled clients.

MNC banks & private banks like HSBC, Citi, ICICI, HDFC, Kotak

are examples.


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Sales Distribution Channels Banks that use their networks to sell MFs as just another financial

service.

Most of the PSBs and other commercial banks including largecooperative banks fall under this category.

For these banks the existing customer base serves as a captiveprospective investor base for marketing mutual funds.

They have the advantage of having already won the trust of thecustomer.

There is no other distribution channel that can have a more effective

retail penetration across Tier-II and Tier-III cities as well as across ruralIndia.

This channel has slowly realized its own potential and is now emergingas a big player.


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Sales Distribution ChannelsIndependent Financial Advisors (IFAs)

Presently the IFA is the friendly neighborhood guy one who is

very effective in selling the product.

However, he has to manage his costs from the commission hegets

Advisory services are today given gratis.

The scenario is changing and the space in advisory services will

undergo a rapid change in the next few years. Financial Planning services will be much sought after


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Sales Distribution ChannelsThe Future The potential for growth of MF distribution channels is huge.

Currently 77% of the investments in mutual funds come from metrosand Tier I towns.

The scenario is likely to change with everyone expanding.

SBI MF alone has more than 100 points of acceptance across India, 28investor service centers, 45 investor service desks and 52 districtorganizers, a base of over 20,000 agents.

SBIs branch network, which is one of the widest networks in thecountry, as well as India Post and offices of CAMS, are parts of thisdistribution network.

Reliance and HDFC are believed to have plans to have their presencein 400 places.


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Sales Distribution Channels UTI already has probably the largest network.

Its strategy, firstly, is to increase the penetration to cover Tier II-

Tier III cities and rural areas.

Secondly, complementary to the first idea, enhancing investoreducation and awareness initiatives by the industry is getting

high priority.

Progressive fund houses are increasing appropriate

technological infrastructure in rural areas and strengthening

alternative distribution networks.


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Sales Distribution Channels Investment is an area where consultation is very

important

The direct route will be used by very few investors.

What is needed is standardization of operational areas

and services like inner fund house swaps, common

portals providing single view of investments with the

entire industry, uniform and pooled customer

education including investor communication.


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Sales Distribution Channels Success in the Indian Mutual Fund

Industry, in the midst of all the growth that

is evident, will depend upon strongdistribution network and transparent

approach towards trust building

Client servicing at retail level has toassume greater importance

6134emfs module iii c

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