How to Start a Mutual Fund Company? 

We are an action-oriented consultancy firm, who believe in providing 100% assistance to our clients by investing our sustain efforts in assisting you in how to start a mutual fund company. 

To know more about how to start mutual fund business, contact us immeditely.

What is a Mutual Fund?

A mutual fund company is engaged in pooling the money from various investors to invest their money in securities such as stocks, bonds, short term debt, etc. Moreover, the combined holding of mutual funds has been termed as a portfolio. 

Can a Non-Resident of India (NRI) invest in mutual funds?

Indeed, a non-resident of India can invest in mutual funds.

We - at JR Compliance - an award winning compliance service provider guarantees to assist you in how to start a mutual fund company in India by emphasizing on the flexbility, adaptability, and transparency. 

We are proud to provide competent mutual fund registration services to our clients. To make the mutual fund company registration unchallenging for our clients, we ensure to follow th time contraints of our clients.

So, to understand how to start a mutual fund company, you should choose an experienced compliance service provider - JR Compliance.

Get Free Expert Consultation!

Your Name*
Phone*
Your Message
Please fill all the required fields!
Please accept terms and conditions to proceed

Benefits of Mutual Funds

Below-mentioned are the ways through which Mutuals funds helps in earning money,

Capital Gain Distributions

When an individual sells the high-priced securities, that person can avail of the high capital gains. Moreover, at the end of the year, the investors will receive the fund distributions excluding capital losses.


Dividend Payments

The fund probably earns the income from the dividend on stocks or interest on bonds. Consequently, these funds pay nearly the total income of shareholders. 


High Net Asset Value

After excluding the expenses, if the value of the fund’s portfolio exceeds, it will increase the value of funds and its shares.

Mutual funds allow investors to redeem their money anytime. Therefore, unlike Fixed Deposit, mutual funds provide pliable withdrawals. However, before that, you have to consider factors such as pre-exit penalty and exit load.

In mutual funds, the experts combine their money and allocate it in various securities. Thus, assist the investors in incurring profit. Moreover, experts also keep a check on challenges and provide the most appropriate solution for the same.

Therefore, it allows the experts to use their expertise and knowledge to manage and operate the mutual fund.

The value of investment won’t increase or decrease in tandem. So, if the value of an investment has increased, the value of others probably will decrease. Hence, the overall performance value of a portfolio has minimum potential to be volatile.

In simpler words, diversification minimizes the risk involved in creating the portfolio, consequently minimizing the investor’s risk.

Mutual funds allow you to invest according to the cash flow position. This eliminates the need to invest a considerable amount of capital at once.

With the introduction of SEBI guidelines, each mutual fund is labeled, which provides color-coding to all the Mutual Fund Schemes. Thus, an investor can ascertain the level of risk in the investment. Hence, it makes the investment process crystalline.

Under Section 80C of the Income Tax (IT) Act, with the help of an equity-linked saving scheme, an individual can save up to Rs 1.5 lakh per year.

Types of Mutuals Funds

1. Money Market Funds

Money market funds involve the lowest risk. These funds are short term instruments, generally government Treasury funds. As it offers low risk, the substantial return is also low.

2. Equity Funds

As the name suggests, this kind of fund fundamentally invests in stocks. Additionally, equity funds are divided into various subcategories depending on the company size, investment style of holding the portfolio, and geography. 

3. Index Fund

An index fund is a combination of stocks and bonds designed to imitate the composition and performance of the financial market index.

4. Fixed Income Fund

A fixed-income fund is one of the most significant categories of funds. As its name implies, it provides returns at fixed intervals (monthly, quarterly, or yearly). However, the income depends on the individual rate, not on the fixed amount.

5. Balanced Fund

The balanced fund includes the components of stocks and bonds. The objective of the balanced fund is to minimize the risk of exposure across assets classes. 

6. Income Fund

As the name suggests, the income fund provides steady current income. Thereto primarily focus on current income, either monthly or quarterly, against capital gains or appreciation.

7. Specialty Fund

Specialty fund is more of every category as it invests in energy companies, financial sector, technology, health, etc.

8. International or Global Fund

As the name suggests, the international fund only invests in foreign assets. However, global funds can provide support worldwide, including in domestic countries.

9. Exchange Traded Fund

It tracks the index, commodity, and other assets purchased and sold on a stock exchange, like a regular stock.

Eligibility Criteria For Registration Under SEBI (Mutual Funds) Regulation, 1996

The sponsor should not be engaged in any illegal activity. Thus, a sponsor should have a soundtrack record. Here, “soundtrack” refers to,

  1. Should continue to engage in financial services for at least five years.
  2. The net worth of the immediate previous year must be more than the capital contribution of the sponsor in asset management establishment.
  3. The net worth of the company must be positive in every five previous years.
  4. The sponsor must have profit excluding depreciation, interest, and tax in three out of five immediate previous years, comprising the fifth year.

In existing mutual funds, such funds are present in trust, and the trust deed needs approval.

The candidate/applicant should be a fit and proper person.

The sponsor must contribute at least 40% and above to the net worth of the asset management company.

The sponsor/director/principal officer should not engage in fraud or be convicted for any offense, including immorality or economic offense.

You are required to appoint a custodian to keep the custody of securities and carry the custodian activities as prescribed by trustees.

You are required to appoint the trustees, as they will act as the trustees for mutual funds as per provisions of regulations.

To manage the mutual funds and operate the scheme of these funds, you must appoint the asset management company as per provisions of regulations.

It is important to fulfill the eligibility criteria before commencing the process of how to start a mutual fund company because without meeting the eligibility criteria, mutual fund company registration process can't move further. 

Consequently, as we understand that not every individual is aware of each aspect of how to start a mutual fund company, which make mutual fund company registration process challenging. That's why, we guarantee to assist you in each step of Mutual fund company registration process.

Documents Required For Mutual Fund Company Registration

Note- Before understanding how to start a mutual fund company in India, you must know the documents required to complete the registration process because incomplete knowledge regarding documentation or submission of inaccurate documents could delay the registration. 

We - at JR Compliance guarantees to invest our sustain efforts in ensuring the availability of all the required documents for registration. Not only that, to make our client understand everything regarding how to start mutual fund business we will educate you and will provide you answer to all your concerns.

Moreover, we believe in maintaining the transparency to keep our client up-to-date concerning how to start a mutual fund company in India. 

How to Start Mutual Fund Business? (Registration Process)

Fill the registration form A as prescribed under Schedule-I of SEBI (Mutual Funds) Regulations,1996. To be noted, according to the proviso to Registration 7 (c) of the Regulations, any individual possessing 40% or above net worth of assets in an asset management company must deem to be a sponsor and need to fill the Form A.

After this, affix the required information and documents.

In the case of an existing establishment, SEBI will conduct an on-site examination with objectives of,

  1. To make the record of handling complaints or grievances.
  2. The previous infrastructure of customer servicing and handling of complaints.
  3. Philosophy and practice of compliance.

Further, within 30 days from the date of communication receipt from SEBI, you must provide all required information. However, failing to provide the necessary information, your application will be considered closed.

If the communication receipt states that you are eligible, you are required to follow the below-mentioned steps within 12 months from the date of communication,

  1. Auditor’s certificate.
  2. Incorporation of Asset Management of Company along with Trustees Company or Board of Trustees.
  3. Developing the infrastructure by the candidate or applicant.
  4. Replica of trust deed and Investment Management Agreement.

Lastly, as you complete the requirements as mentioned earlier, you will obtain the certification of registration.

Note- If no mutual fund scheme is made within 12 months of the registration date, the grant of the registration certificate will be canceled. 

Above-mentioned are the steps include in how to start a mutual fund company. To be noted, it is essential to obey the required steps as mentioned to complete the registration. However, it is not possible for a layman to understand every steps of mutual fund company registration process because your hands must be full with other work. 

That's why, we - an award winning compliance service provider guarantees to provide you 100% assistance in how to start a mutual fund company by focusing on transparency and adaptability.

Our Role - How to Start a Mutual Fund Company?

We will assist you in the process of fulfilling the eligibility criteria to allow you to apply for Mutual Fund Company Registration.

We guarantees to provide you assistance in how to start a mutual fund company.

Our Mutual Fund Registration experts will provide you assistance in documentation to ensure the submission of documents as and when required.

We will provide you with appropriate assistance during onsite inspection/examination.

Our Mutual Fund Registration consultants will coordinate with the officials to ensure appropriate follow-ups and acknowledgment (in how to start mutual fund business).

We will provide you with the most appropriate solution to your concerns concerning how to start a mutual fund company.

SEBI Mutual Fund Company Registration

Conclusion

Understanding the mutual fund company registration is tough to understand as an applicant must fulfill eligibility criteria and documentation to commence the mutual fund company registration process. That is not possible to perform by a company alone, as it requires expertise and experience. 

Consequently, JR Compliance comprises the experienced and knowledgeable team who will provide you most satisfactory assistance in how to start a mutual fund company in India.

Hence, for expert and professional services, contact us immediately.

Disclaimer:

All to whom it may concern, JR Compliance is not liable for any direct, indirect, incidental, special, or consequential damages from the use of any information contained on our website, or from any action/ decision taken as a result of using the site.

The information provided on this website is with the sole intention to give information, not a professional opinion. Moreover, our website might include copyrighted material that may or may not have been specifically authorized by the owner, however, used for the purpose of providing information. That constitutes a “fair means” under Section 52 of the Copyright Act, 1957.

Customer Support: 1800121410410
Phone:

+91 1143022315

Email:

info@jrcompliance.com

support@jrcompliance.com

Address:

K8, Sector 3, Bawana Industrial Area, Delhi - 110034 (India)

Intellectual Property -  Unless otherwise stipulated, this site is our proprietary intellectual property. All the graphics, media, editorial content, and website design (altogether, “content”) used are the intellectual property of JR Compliance which are protected by Trademark, Copyright, and other applicable intellectual property laws. 

Any content or mark might be copied, reproduced, republished, and displayed publicly for any profit-oriented purpose whatsoever, require our prior written permission, otherwise, an offender may have to face legal consequences. 

Get Your Free Consultation!

Ask any questions you have. Our Experts would love to help you.

Full Name*
Phone no.*
Your message*
Please fill all the required fields!
Please accept terms and conditions to proceed
Please wait