Role & Responsibility of Asset Management Company

The AMC has to file details of its directors and transactions with sponsor/associate companies, with the trustees/SEBI trustees/SEBI. . The AMCs are prohibited from appointing as a key personnel, any person found guilty of any economic offence or involved in a violation of securities laws laws. .

Role & Responsibility of Asset Management Company

Every AMC is required to keep, maintain and preserve proper books of accounts/records/ documents for 8 years, for each scheme scheme. . It should follow the specified accounting policies and standards so as to provide the appropriate details of the schemewise disposition of the assets at the relevant accounting date and the performance during the period, together with information regarding the distribution and accumulation of the income accruing to the unitholders unitholders, , in a fair and true manner manner. .

Role & Responsibility of Asset Management Company

All expenses should be clearly identified and appropriated in the individual schemes schemes. . The AMC may charge the mutual fund with investment and advisory fees, which should be fully disclosed in the offer document. document . All other expenses AMC/trustees/sponsor. AMC/trustees/sponsor . would be borne by the

Initial issue expenses of floating a scheme cannot exceed 6 per cent of the initial resources raised and must be accounted in the books of account of the scheme scheme. .

Role & Responsibility of Asset Management Company

An AMC can launch a mutual fund scheme after its approval by the trustees and filing of the offer document with the SEBI SEBI. . The offer document should contain adequate disclosures to enable the investors to make an informed investment decision. decision . All advertisements pertaining to mutual fund schemes should conform to the advertisement code specified by SEBI. SEBI . The advertisement should also disclose the investment objective of the scheme scheme. . The offer document and advertisement materials should not be misleading or contain incorrect/false information information. .

Role & Responsibility of Asset Management Company

An AMC may launch schemes on a 'load' or 'partial load' basis basis. . In case of a no load scheme, the initial issue expenses should be borne by the AMC AMC. . In a partial load scheme a part of the load would be borne by the AMC and the balance by the scheme scheme. . In a load scheme, the entire expense would be borne by the scheme scheme. .

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 account statements to the unit holders. The Registrar and Transfer agent also handles communications with investors and updates investor records.

Role & Responsibility of Custodian

The mutual fund should appoint a custodian to carry out the custodial services for the scheme scheme. . Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody. . A mutual fund cannot appoint a custodian in which 50 per cent or more of the voting rights/directorships is held by the sponsor/associate companies companies. . The custodian agreement, the service contract and terms of appointment require prior approval of the trustees trustees. .

Fund Structure of Birla Sun Life

Name of the Mutual Fund :Birla Sun Life Mutual Fund 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

Fund Structure of Birla Sun Life

Name of the Custodian : J.P. Morgan Chase Bank, Mumbai, registered with SEBI under registration number IN/CUS/014 Name of the Registrar : Computer Age Management Services Pvt. Ltd. (CAMS), Chennai

Sales Distribution Channels Essentials 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 demographic study Proper training of sales staff Educating / counseling the customer about products, After sales servicing

Sales Distribution Channels

Direct Selling
Direct selling is the least significant element today. Normally, only very big ticket items are done through this channel Alternatively, it derives its inflows mainly from online sales. However, recently this channel is getting a fillip. MFs are gearing up by opening their own offices in more places.

Sales Distribution Channels

Organised Distributors
Organised distributors are the backbone of MF distribution. They have infrastructure and flexibility to adapt to the need of the hour. They too have realized the importance of going to smaller centers and are establishing offices in urban and semi-urban locations. This is the channel which needs to be nurtured to expand

Sales Distribution Channels

Banks 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 practices with qualified staff and well-heeled clients. MNC banks & private banks like HSBC, Citi, ICICI, HDFC, Kotak are examples.

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 large cooperative banks fall under this category. For these banks the existing customer base serves as a captive prospective investor base for marketing mutual funds. They have the advantage of having already won the trust of the customer. 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 rural India. This channel has slowly realized its own potential and is now emerging as a big player.

Sales Distribution Channels

Abroad banks are among the leading fund supermarkets. The Post Office too has been emerging as an effective channel. PSBs & post offices are likely to emerge as a very crucial channel for financial inclusion in the MF arena. This combination along with the online variants in the near future will dominate the distribution of mutual funds.

Sales Distribution Channels

Independent 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 he gets 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

Sales Distribution Channels

The Future
The potential for growth of MF distribution channels is huge. Currently 77% of the investments in mutual funds come from metros and Tier I towns. The scenario is likely to change with everyone expanding. SBI MF alone has more than 100 points of acceptance across India, 28 investor service centers, 45 investor service desks and 52 district organizers, a base of over 20,000 agents. SBIs branch network, which is one of the widest networks in the country, as well as India Post and offices of CAMS, are parts of this distribution network. Reliance and HDFC are believed to have plans to have their presence in 400 places.

Sales Distribution Channels

UTI already has probably the largest network. Its strategy, firstly, is to increase the penetration to cover Tier IITier III cities and rural areas. Secondly, complementary to the first idea, enhancing investor education 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.

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.

Sales Distribution Channels Success in the Indian Mutual Fund Industry, in the midst of all the growth that is evident, will depend upon strong distribution network and transparent approach towards trust building Client servicing at retail level has to assume greater importance