Role of sponsor, Financial Management

Assignment Help:

Role of Sponsor

In the establishment of mutual fund trust, the main role is played by the sponsors. Both the trustees and the fund managers or the asset management company have to be located and appointed by the sponsor. Alternatively, the sponsor has to appoint Board of Trustees and incorporate an asset management company. It has to submit to Securities Exchange Board of India (SEBI) the drafts of the Trust Deed for creation of mutual fund trust with particulars of the persons consenting to be the Trustees both from the sponsor company and the outsiders. It has also to submit draft Memorandum and Articles of Association of Asset Management Company to SEBI with particulars of Directors, i.e., the persons to be appointed from the sponsors' Board and those to be taken from outside. It has also to suggest the name and particulars of the custodians to be engaged for the mutual fund. Once the mutual fund trust is authorized by SEBI, the role of sponsor diminishes as it is the Trust that will interact with SEBI.

Mutual Fund Trust or Trustee

Mutual Fund Trust is created by the sponsors under the Indian Trust Act, 1882 which is the main body in the creation of Mutual Fund Trust.

The main functions of Mutual Fund Trust are as follows:

  • Planning and formulating mutual fund schemes.
  • Seeking SEBI's approval and authorization to these schemes.
  • Marketing the schemes for public subscription.
  • Seeking RBI approval in case NRIs' subscription to mutual fund is invited.
  • Attending to trusteeship functions. This function as per guidelines can be assigned to separately established trust companies too.

In the absence of such companies, existing debenture trustees, banks and financial institutions may be contracted to act as mutual fund trustees with the approval of SEBI. Alternatively, a separate Board of Trustees consisting of individuals of sufficient repute and experience may act as mutual fund trustees. Two third of the trustees shall be independent persons and shall not be associated with the sponsors or be associated with them in any manner whatsoever. The trust company, companies as aforesaid or the Board of trustees including the eligibility of each member shall be intimated to SEBI as per the Guidelines.

Each trustee shall file the details of his transactions of dealing in securities with Mutual Fund on a quarterly basis. Trustees are also required to submit an annual report to the investors in the fund.

 


Related Discussions:- Role of sponsor

Please help me solve this question, there are 3 compaies i have to find out...

there are 3 compaies i have to find out the price of equity share by using walters and gordons model.

Performance of mutual funds, Performance of Mutual Funds The performanc...

Performance of Mutual Funds The performance of Mutual Funds can be evaluated by calculating the rate of return earned during the relevant comparison period. The return will inc

What are free cash flows, What are "free cash flows?" Free cash flows s...

What are "free cash flows?" Free cash flows signify the total cash flows from business operations that are available to be distributed to the suppliers of a firm's capital each

Determine the cost, a) Social marketing is the use of normal marketing meth...

a) Social marketing is the use of normal marketing methods to achieve the benefits of social change, such as informing the public about the harm of under-age drinking, rather than

Bankers acceptance, Bankers' acceptance is a debt instrument created ...

Bankers' acceptance is a debt instrument created to smoothen the commercial trade transactions. It is named so because a banker in this case accepts the ultimate

Testing the hypothesis - chi square test, Testing the Hypothesis To tes...

Testing the Hypothesis To test the null hypothesis, we compare the observed and the expected frequencies. If the actual and the expected values are nearly equal to each other w

Explain economic order quantity, Q. Explain Economic Order Quantity? Ec...

Q. Explain Economic Order Quantity? Economic Order Quantity (EOQ):- Economic order quantity (EOQ) is that quantity of material for which each order must be placed. Purchasing l

Bajaj electronics caselet, how would you judge the potential profit of Baja...

how would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth Plastics and give your views to increase the profit?

Straight line depreciation, Alger Corp wants to buy some construction equip...

Alger Corp wants to buy some construction equipment for $50,000, which has a useful life of 4 years with no salvage value. Alger uses straight-line depreciation. Alger has a tax ra

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd