A mutual fund is a professionally managed investment scheme that pools money from multiple investors and further invests money to purchase securities such as stocks, bonds, golds, and debt.
Asset Management Company (AMC)
SEBI-licensed company which pools money from multiple investors and where a fund manager works and manages pooled money.
Structure
Fund sponsor
- Corporate body, which expresses a desire to set up an AMC and approaches SEBI for setting up the AMC.
- Main promoter of the Asset Management Company.
Trustees
- Once the fund sponsor gets the license from SEBI, the fund sponsor is required to register a trust and appoint a board of trustees.
- The Trust ensures that the AMC constituted by the Fund Sponsor performs its duties in the right spirit and works in the interest of the clients of the AMC (Unit Holders).
- SEBI mandates that the trustee of the fund should be independent and should not be associated in any way with the sponsor.
AMC (Investment Manager)
- Trust in consultation with the fund sponsor appoints an AMC which is responsible for the operation and management of various mutual fund schemes in compliance with the rules and regulations of SEBI.
- AMC form a mutual fund and manage the various investment schemes of the AMC.
- AMC is the core engine responsible for running the mutual fund show and houses a chief investment officer (CIO), fund managers, analysts, and everyone else responding to run and manage the mutual fund.
Fund Manager
- SEBI-registered professional responsible to manage funds of AMC.
Custodian
- AMC appoints a custodian (safekeeper) of mutual fund assets to hold all the shares purchased by the mutual fund.
Registrar and Transfer Agents (RTAs)
- AMC appoints RTA’s to ensure that they serve the customers of a mutual fund (unit holders) in terms of issuing folio numbers, transfer of unit, etc.
- Custodian and RTA works as ‘Service Provider’ for AMC.
All the parties associated work together to run a mutual fund company.
