One of the important aspect of the mutual fund regulations and operations is the investors protection and discloser norms. It serves the very purpose of the mutual fund guidelines.

Steps to be taken by mutual fund for improving disclosers and compliance standard

1.All mutual fund should disclosed full portfolio of their scheme in the annual report with in one month of the close of each financial year.

2.The Asset Management company must prepared of compliance manual and design internal audit system including audit system before the launch of any scheme.The trustees are also required to constitute an audit committee of the trustees which will review the internal audit system and the recommendation of the internal and statutory audit report ensure that the rectifications are suggested by internal and external auditors abr acted upon.
3.The AMC shall constitute an in house valuation committee consisting of senior executives including personnel from accounts, fund management and compliance deptt.
The committee would on a regular basis review the system and practices of valuation of securities.

4.Trustee shall review all transactions of the mutual fund with the associates on a regular basis.


The offer documents of a scheme lays down the investors right. The important rights of the unit holders are as below:

1.Unit holders have a proportionate right in beneficial ownership of the scheme assets as well as any dividend or income declared under the scheme .

2.They have the right to information regarding any adverse happening.

3.They are entitled to received dividend warrant with in 42 days of the date of dividend declaration.

4.AMC can be terminate by 75%of the unit holders of the scheme present and voting at a special meeting.

5.The holders have the right to inspect major documents of the fund i.e. material contract, the investment management agreement, the custodian services agreement, registrar and transfer agencies agreement, memorandum and articles of association of the AMC , recent audited financial statements and the offer documents of the scheme.

6.With the consent of 75% of the unit holders they have the right to approve any changes in the close ended scheme.

7.Every unit holder have the right to received a copy of the annual statement and periodic statement regarding his transactions.


1.Unit holders can not sue the trust but they can initiate proceedings against the trustees, if they feel that they are being cheated.

2.Except in certain circumstances AMC can not assure a specified level of return to the investors. AMC can not be sued to make good any shortfall in such scheme.


1.An investor should carefully study the risk factors and other information provided in the offer documents .Failure to study will not entitled him for any rights thereafter.

2.It is the responsibility of the investor to monitor his scheme by studying the reports and other financial statement of the fund.

So before investing everybody should take necessary action to familiar with the scheme.


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