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STRUCTURE – RELIANCE MUTUAL
FUND
B Y
S A I N A T T H W A G H
2/27/2011W E L I N G K A R I N S T O F M A N A G E M E N T A N D
D E V E L O P M E N T1
MUTUAL FUND ?
“A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor's proportionate ownership of the fund's holdings and the income those holdings generate “
RELIANCE MUTUAL FUND
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 3
• India’s leading Mutual Fund
• Average Assets under Management: 1,02,179 Cr
• Investor Count : 73 Lakh Folios
• Presence in 159 Cities across country
• 14 years of extensive market experience, 35 schemes combined with a strong performance track record.
• - AMFI Website, 2010
CONSTITUTION AND MANAGEMENT
AMCTrustSponsor
Reliance Capital Limited (RCL)
Reliance Capital Trustee Co. Ltd
(RCTC)
[Trustee]
Reliance Mutual Fund (RMF)
[Name of Fund House]
Reliance Capital Asset Management Limited
Net Worth : 841.32 Cr
Reliance Mutual Fund [Trust]
47 FUNDS RCAM
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 5
Reliance Growth Fund
(September 1995)
Reliance Vision Fund
(September 1995)
Reliance Fixed Horizon Fund VI
(December 2007)
Reliance Liquidity Fund (June
2005)
Reliance Income Fund
(December 1997)
Reliance Liquid Fund (March
1998)
Reliance Fixed Horizon Fund VII
(January 2008)
Reliance Interval Fund (March
2007)
Reliance Medium Term Fund
(August 2000)
Reliance Short Term Fund
(December 2002)
Reliance Fixed Horizon Fund IX
(March 2008)
Reliance Equity Advantage
Fund (June 2007)
Reliance Fixed Term Scheme
(March 2003)
Reliance Banking Fund (May
2003)
Reliance Fixed Horizon Fund X
(August 2008)Reliance Fixed Horizon Fund V
(September 2007)
Reliance Gilt Securities Fund
(July 2003)
Reliance Diversified Power
Sector Fund (March 2004)
Reliance Fixed Horizon Fund XII
(November 2008)
Reliance Fixed Horizon Fund IV
(August 2007)
Reliance Monthly Income Plan
(December 2003)
Reliance Floating Rate Fund
(August 2004)
Reliance InfrasReliance Equity
Linked Saving Fund - Series I
(December 2007)
Reliance Fixed Horizon Fund
(April 2006)
Reliance Pharma Fund ( May
2004)
Reliance NRI Equity Fund
(October 2004)
Reliance Natural Resources
Fund (January 2008)
Reliance Fixed Horizon Fund II (
November 2006)
Reliance Media &
Entertainment Fund
(September 2004)
Reliance Index Fund (February
2005)*
Reliance Fixed Horizon Fund
VIII (March 2008)Reliance Long Term Equity
Fund (November 2006)
Reliance NRI Income Fund
(October 2004)
Reliance Fixed Maturity Fund –
Series I (March 2005)
Reliance Banking Exchange
Traded Fund (May 2008)
Reliance Equity Fund (February
2006)
Reliance Equity Opportunities
Fund (February 2005)
Reliance Regular Savings Fund
(May 2005)
Reliance Fixed Horizon Fund XI
(October 2008)tructure Fund
(June 2009)
Reliance Fixed Tenor Fund
(November 2005)
Reliance Fixed Maturity Fund –
Series II (April 2005)
Reliance Tax Saver (ELSS) Fund
(July 2005)
Reliance Gold Exchange Traded
Fund (October 2007)
Reliance Fixed Horizon Fund I
(August 2006)
Reliance Fixed Horizon Fund III
(March 2007)
Reliance Money Manager Fund
(March 2007)
TRUSTEE
Registered Office: Corporate Office :
EO1, Reliance Greens,
Village Motikhavdi,
P.O. Digvijaygram,
District Jamnagar -
361140
(GUJARAT)
Express Building (4th & 6th
Floor),
14, 'E' Road, Churchgate,
Opp. Churchgate Station,
Mumbai 400 020.
Tel. 022 – 3041 4800,
Reliance Capital Trustee Co. Limited (RCTC), a company incorporated under the Companies Act, 1956, has been appointed as the Trustee to the Fund vide the Trust Deed dated April 25, 1995 executed between the Sponsor and the Trustee. For Eg: OD says that RCTC has been appointed as the Trustee to
“Reliance India Power Fund”, a Venture Capital Fund registered with the SEBI vide registration number IN/VCF/05-06/062 dated June 16, 2005
An application has also been filed for registration of “Reliance Venture Capital Fund” with SEBI.
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 6
AMC
Registered Office: Corporate Office :
EO1, Reliance Greens,
Village Motikhavdi,
P.O. Digvijaygram,
District Jamnagar -
361140
(GUJARAT)
Express Building (4th & 6th
Floor),
14, 'E' Road, Churchgate,
Opp. Churchgate Station,
Mumbai 400 020.
Tel. 022 – 3041 4800,
BANKERS TO RCAM
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 7
• ABN Amro Bank
• Axis Bank
• Citibank N. A.
• Deutsche Bank AG
• Development Bank of Singapore
• HDFC Bank Limited
• HSBC Bank
• ICICI Bank Limited
• IDBI Bank
• Ing Vysya Bank
• Kotak Mahindra Bank
• State Bank of India
• Standard Chartered Bank
• Yes Bank
STRUCTURE OF AMC
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 8
CEO
Mr. Sudeep Sikka
Head Equity Investments
Mr. MadhusudanKela
Equity Fund Managers
Head Fixed Income
Mr. AmitabhMohanty
Debt Fund Managers
Bo
ard
of D
irecto
rs
ROLE OF AMC
Transparency
Liquidity
Flexibility
Decision Making
Valuation
Drafting of Structure of Scheme
CEO of AMC ensures fund complies with
SEBI norms and investments made are
in norms of Fund objectives as in OD
Investment decisions made in interest
of unit holders.
Fund Managers ensure that
investments are made in the interest of
Unit holders and as per the norms and
objectives of FOD
AMC shall not utilize the services of
Sponsor for purchase of new securities
AMC reports data to both SEBI and
Trustees.
The RCAM shall not invest in any of its
schemes unless full disclosure of its
intention to invest has been made in the
offer documents
Decision are taken by team comprising of
Fund Managers
Investment Committee
Based on
Research Report
Market Intelligence
Analysis of Macro and Micro economic
indicators
Market Trends
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 10
DUTIES AND OBLIGATIONS OF THE AMC
a) RCAM will be responsible for making, floating,
issuing Schemes for the Trust after approval of the
same by the Trustees and SEBI as well as investing
and managing the funds mobilized under various
Schemes, in accordance with the provisions of the
Trust Deed and SEBI Regulations.
b) RCAM must disclose the basis of calculating the
repurchase/redemption price and Net Asset Value
of the various Schemes of the Fund to the
investors, at such intervals as may be specified by
SEBI and/or the Trustees and in accordance with
the SEBI Regulations.
c) RCAM must maintain books and records about
the operation of various Schemes of the Fund to
ensure compliance with the Regulations and
guidelines for Mutual Funds as may be issued by
SEBI from time to time, and shall submit a Scheme
wise quarterly report on functioning of the Fund to
the Trustee or at such intervals and in such manner
as may be required or called for by the Trustee or
SEBI.
d) RCAM shall exercise all due diligence and vigilance in carrying out its duties and in protecting the rights and interest of the
unit holders.
e) RCAM will at all times ensure that the Trust Fund is segregated from assets of RCAM and assets of any other funds for which RCAM is responsible.
f) RCAM shall submit to the Trustee all information concerning the operation of the various Schemes of the Fund managed by RCAM at such intervals and in such manner as required by the Trustee to ensure that RCAM is complying with the provisions of the Trust Deed and SEBI Regulations.
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 11
IMA AND DUTIES OF RCAM
Trustee main duties before Fund Launch:
(i)Systems in place for its back office, dealing room and accounting
(ii) Appointed all key personnel including fund manager(s) for the Scheme(s) and submitted
their bio-data which shall contain the educational qualifications, past experience in the
securities market to SEBI, within 15 days of their appointment;
(iii) Appointed Auditors to audit its accounts;
(iv) Appointed a Compliance Officer to comply with regulatory requirement and to redress
investor grievances;
(v) Appointed Registrars and laid down parameters for their supervision;
(vi) Prepared a compliance manual and designed internal control mechanisms including
internal audit systems; and
(vii) Specified norms for empanelment of brokers and marketing agents.
The Trustees shall obtain the consent of the unit holders of the Scheme:
(i) Whenever required to do so by SEBI in the interest of the unit holders;
(ii) Whenever required to do so, on the requisition made by three-fourths of the unit holders
of any Scheme under the Mutual Fund;
(iii) When the majority of the Trustees decide to wind up the Scheme or prematurely redeem
the Units W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 12
DUTIES AND OBLIGATIONS OF THE TRUSTEES
1. Trust Deed
2. Right to Obtain Information from AMC
3. Monitors broker and AMC transactions
4. Ensures AMC works as per SEBI regulations, 1996
5. Informs SEBI for 1 Lac Plus transactions
6. Informs Unit holders and SEBI for change in structure and load if situation demands
change
1. Unit holders are given a option to Exit
2. Change is advertised in Leading Newspaper
7. Periodically review service contracts like Custodian documents
8. Periodically Review Customer Complaints and Review.
9. Appoint Statutory Auditors and have one Independent Director
10. Due Diligence
11. Signs the IMA with the AMC
12. Keeps a check on Vacant Positions and nominates individual.
13. Prescribe and adhere to a code of ethics by the Trustees, Asset Management Company
and its personnel. W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 13
DUTIES AND OBLIGATIONS OF THE TRUSTEES
THE CUSTODIAN
Trustee has appointed Deutsche Bank as Custodian
Duties of Custodian:
Provide post-trading and custodial services to the Mutual Fund;
Keep securities and other instruments belonging to the Scheme in safe custody;
Ensure smooth inflow/outflow of securities and such other instruments as and when necessary, in the best interests of the unit holders
Be responsible for loss of or damage to the securities due to negligence on its part or on the part of its approved agents.
The Custodian will charge the Mutual Fund, portfolio fee, transaction fee and out-of -pocket expenses in accordance with the terms of the Custody Agreement and as per any modification made thereof from time to time.
THE REGISTRAR
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 15
•RCAM has appointed M/s. Karvy Computershare Pvt. Limited
•As Registrar to the Scheme KCPL will
accept and process investor's applications
handle communications with investors
perform data entry services
Dispatch Account Statements
other functions as agreed, on an ongoing basis.
•The Registrar is responsible for carrying out diligently the functions of a
Registrar
and Transfer Agent and will be paid fees as set out in the agreement entered
into with it and as per any modification made thereof from time to time.
FEES
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 16
AMC Fees : In terms of the Investment Management Agreement and the
Regulations, the AMC is entitled to a management and advisory fee at the rate
of 1.25% of the average daily net assets for net assets up to Rs.100 crore and
at the rate of 1.00% for the net assets in excess of Rs.100 crore. For Schemes
launched on a No- Load basis, the AMC is entitled to collect and additional
management fee of up to 1% of the average net assets outstanding in each
financial year and the total management fee shall not exceed the limit stated
under the Regulation 52(6) of SEBI.
Trust Fees: Pursuant to the Trust Deed constituting the Fund, the Fund is
authorized to pay the Trustee, a fee for their services, in addition to the
reimbursement of all costs, charges and expenses, sum computed at the rate
of 0.05% of the amount, being the aggregate of the Trust Fund and Unit Capital
of all the Schemes put together on 1st April each year or a sum of Rs.5
Lacs, which ever is lower or such other sum as may be agreed upon between
the Settler and the Trustee from time to time. The Trustee may charge further
fees as permitted from time to time under the Trust Deed and the Regulations.
SPONSOR LOSS PROTECTION
RCL contributes Rupees One Lac as the initial contribution to the corpus for the
setting up of the Mutual Fund.
RCL is responsible for discharging its functions and responsibilities towards the Fund
in accordance with the SEBI Regulations.
The Sponsor is not responsible or liable for any loss resulting from the operation of
the Scheme beyond the contribution of an amount of Rupees one lakh made by
them towards the initial corpus for setting up the Fund and such other accretions
and additions to the corpus
DUTIES AND OBLIGATIONS OF INVESTOR
Study of Offer Document
In case of dividend declaration, investors have a right to receive the dividend within 30 days of
declaration
On redemption request by investors, the AMC must dispatch the redemption proceeds within
10 working days of the request.
Investors can obtain relevant information from the trustees and inspect documents like trust
deed, investment management agreement, annual reports, offer documents, etc. They
must receive audited annual reports within 6 months from the financial year end.
Investors have a right to be informed about changes in the fundamental attributes of a
scheme. Fundamental attributes include type of scheme, investment objectives and
policies and terms of issue.
Investors can approach the investor relations officer for grievance redressal
MUTUAL FUND CYCLE
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 19
Investors
Fund manager
Securities
Returns
MUTUAL FUND OPEARATION
PRODUCT
DESIGN
PRODUCT
MARKETING
FUND
MANAGEMENT
OUT
SOURCING
INVESTOR’S
SERVICE
THE
CHAIN
OF
OPERATION
MUTUAL FUND OPERATION
PRODUCT DESGIN
INNOVATION
SUPERIOR DESIGN
ADAPATABILITY
PRODUCT MARKETING
COST
AGGRESSIVE
MARKETING
UPFRONT COST
FUND MANAGEMENT
CAPITAL PROTECTION
MARKET TIMING
ASSET QUALITY
OUTSOURCING
COST CONTROL
FLEXIBILITY
CHOICE
INVESTOR SERVICE
CUSTOMER FOCUS
BETTER
CONFIDENCE
EFFICIENT SERVICE
TYPES OF MUTUAL FUNDS
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 22
Type of Mutual Fund
Schemes
Structure
Open Ended Funds
Close Ended Funds
Investment Objective
Growth Funds
Income Funds
Balanced Funds
Money Market Funds
Special Schemes
Industry SpecificSchemes
Index Schemes
Sectoral Schemes
W E L I N G K A R I N S T O F M A N A G E M E N T A N D D E V E L O P M E N T 23
Thank You