Mutual and other Funds

51.''SEBI set up various committes on accounting policies ,NAV and Pricing of MF units .'' Explain about the SEBI regulation on accounting policies of a Mutual Fund.

In order to regulate the Industry and to protect the interest of the investors,SEBI , for the first time, issued a set of regulations in 1993.Later, it was found that the Industry did not comply with the regulations in several cases .In 1996,SEBI then revised its regulations issued on Mutual Fund which govern the transparency of operation and disclosure standards of Mutual Fund Industry SEBI set up various committess on accounting policies ,NAV and Pricing of MF units .For the investors who keep track of their investment regularly ,NAV disclosures of Mutual Funds are accessible on a daily basis.Portfolio mix of every Fund can be had on a monthly basis.Investors can also receive their NAV details and other information through emails.

Ans: Accounting policies of Mutual Fund scheme are somewhat different from those of an industrial concern .The Ninth Schedule to SEBI (Mutual Fund) Regulations 1996, deal with accounting policies and standards that a Mutual Fund has to adopt.

Different heads of accounting policies are as below;

i. Portfolio Valuation

ii. Securities Transactions

iii. Investment Income

iv. Deferred Revenue Expenditure

v. Dividend Equalization Reserve

vi. Unit Premium Reserve

vii. Agent's Commission.