Introduction to Mutual Funds, its benefits and Regulatory structureAn Investor Education & Awareness Initiative By Franklin Templeton Mutual Fund

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• Pools of Investment

• Each Pool of money is called a Mutual Fund Scheme

• Mutual funds assist in Earning Income or Building Wealth

• Utilise the knowledge and experience of a professional fund management team

• Benefit from the economies of scale

Mutual Funds

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• Easy to understand

• To earn income or build wealth

• Offer choice of various categories of schemes

• Access to ready investment portfolio and past track record

• For regular and disciplined investing

• Investment professionals

Why Should You Invest In Mutual Funds?

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• Status of a unit holder

• Unit certificates or statements of accounts

• Share in gains or loss in value of the mutual fund scheme

What Do You Get As A Mutual Fund Investor?

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• Diversification

• Professional management

• Lower entry level

• Economies of scale

• Flexible and Innovative Plans for Investors

• Liquidity

• Transparency

• Well regulated structure

Benefits Of Investing In Mutual Funds

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• Securities and Exchange Board of India (SEBI) is the Regulatory Authority

• SEBI aims to protect the interest of the investors. It has framed SEBI (Mutual Funds) Regulations, 1996

Regulatory Structure Of Mutual Funds In India

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“Mutual fund” means a fund established in the form of a trust to raise monies through the sale of units to the public or a section of the public under one or more schemes for investing in securities including money market instruments or gold or gold related instruments or real estate assets.

- Source: Sebi.gov.in

SEBI (Mutual Funds) Regulations, 1996

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• Mutual fund is established in the form of a Trust

• Mutual funds raise money through sale of units to the public

• Mutual fund schemes can invest in various securities

Key Features Of A Mutual Fund As Per Its Defined Structure

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Key Constituents Of A Mutual Fund

SPONSORS TRUSTAsset

Management Company

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• Sponsors

• Trust

• Asset Management Company (AMC)

Key Constituents Of A Mutual Fund (Contd.)

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• An Industry Body created to promote the interest of mutual funds in India

• All AMCs in India are members of AMFI

• Maintain high professional and ethical standard

• AMFI has set up ‘AMFI Code of Ethics’

• AMFI Guidelines & Norms for Intermediaries (AGNI)

• AMFI recommends and promotes best business practices and code of conduct

• AMFI interacts with SEBI and represents the Indian mutual fund industry

Association Of Mutual Funds In India (AMFI)

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• Custodian

• Registrar and Transfer Agents (RTA)

• Auditors

• Fund Accountants

• Mutual Fund Distributors

• Collection Bankers

Other Service Providers In Mutual Fund Industry

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Key Points To Remember

• Mutual funds are established in the form of a Trust• Mutual funds are collective investment vehicles• Mutual funds assist investors in earning income and

building their wealth• Mutual fund investors get a proportionate share in a

mutual fund scheme and are called unit holders • Any Profit or Loss made by a mutual fund scheme is

proportionately shared by the unit holders

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Some Key Take Away Points!

• Mutual funds offer several benefits• SEBI is the regulatory authority for the Indian mutual fund

industry• SEBI aims to protect the interest of the investors• Sponsors are the individuals or entity who initiate the

process of formation of a mutual fund• Trustees of the mutual fund appoint the AMC• AMFI is an Industry Body created to promote the interest of

the Mutual Fund Industry

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Lets Do A Short Quiz!

we now invite you to test your learning by taking up this simple quiz

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1) The Primary Role of a Mutual Fund is to____________________.A. Regulate the capital marketsB. Assist investors in earning income or building their wealthC. Collect moneyD. None of the above

2) Mutual Funds are established in the form of a TrustA. True B. False

3) Mutual Fund investors are called____________.A. Regulators B. Fund ManagersC. Unit Holders D. Sponsors

Quick Quiz

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4) ________________approach SEBI for registration of a mutual fund.A. SponsorsB. AMCsC. TrustD. Unit Holders

5) An Industry Body created to promote the interest of the Mutual Fund Industry is called______________A. AMCB. SEBIC. CustodianD. AMFI

Quick Quiz

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Thank You For Participating!

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Mutual Fund Investments Are Subject To Market Risks, Read All Scheme

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