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Understanding the concept of mutual funds is critical to start a mutual fund company in India. It involves collection of money that is put together by investors. This pool of money is capable of earning highest possible return. The fund is managed collectively by professional managers. In this article, we shall know about mutual funds and how you can set up a mutual funds company.
Mutual funds is a collection of funds of investors invested by the fund managers. The return earned in the form of dividends is disbursed among investors as a return of their investment. Mutual fund and its registrations are regulated by the Securities Exchange Board of India (mutual fund) Regulation, 1996.
The applicant should fulfil the following eligibility criteria of SEBI (Mutual Funds) Regulations 1996 for the grant of certificate of registration:
The steps to start such company are as follows:
In order to start your own private mutual fund company in India, get approval from the Securities and Exchange Board of India and get the certificate of registration as well. Thereafter the applicant should get approval from the securities and exchange commissions. The individual should have enough operating capital to sustain the company.
Mutual funds are investment companies that are registered with Security and Exchange Commission. It applies strict rules and provisions for mutual funds. An individual must set up a corporation in the form of LLC or LLP to start a mutual fund.
Get approval for institutional investment management from the Security and Exchange Commission for managing the mutual fund. An individual can get registration using Form ADV. Disclosures need to be made under this form regarding the size of portfolios an applicant wishes to manage.
Fees, as well as operating costs, are some of the expenses of the mutual fund. Attracting the investor’s fund to build portfolio is the most considerable expense of any mutual fund. An individual requires a portfolio of massive amount for being a profitable company.
A mutual fund can partner with any shared trust that provides the board of directors, insurance and regulatory compliances. These companies assist small companies and start-up mutual funds to be competitive.
The procedure to register mutual fund with SEBI is as follows:
Mutual funds are less volatile thus is the safest option, and it also gives a good share of return as well. In case you have any query regarding starting a mutual fund company in India, consider contacting a professional.
Read our article: Requirements for Investment Advisors Registration with SEBI