-
24. Explain in details the right and obligation of an investors.
The regulatory environment for Mutual Funds in India has evolved over the years and today, there is very comprehensive regulatory framework governing the Mutual Fund Industry. This framework ensures that the interest of investors , especially retail investors, is protected and there is complete disclosure and transparency in every aspect of Mutual Funds' functioning . The regulation ensures that every Mutual Fund has an effective risk management system so that systematic risks are controlled. In fact, some of our regulation are far ahead of many of the more mature markets. The regulation in terms of uniform cut-off time for subscription and redemption , minimum number of investors in each scheme , the regulation ensuring that there is no concentration of holding in a scheme , certifiaction requirements for distributors and Mutual Fund employees are some of the important regulation that have been introduced in the recent past to protect investors interests.
Ans: The Rights and Obligation of Investors are: An investors is entitled to receive shares/unit certificates allotted to him within a period of six weeks from the date of closure of the subscription and he is also entitled to get the unit/share certificates transferred within a period of 30 days from the date of lodgment for transfer . If the total collection of the Funds by a Mutual Fund is less than the minimum amount of subscription planned to be raised , as mentioned in the prospectus, the applicants are entitled to receive the entire application money as refund, within a period of six weeks from the date of closure of subscription . Should the refund be delayed beyond this period , the applicants are entitled to receive, along with the application money , interest at the rate of 15% p.a for the period of delay.