CH: 4 - Investors’ Rights & Obligations
1. Subscription/Allotment/Refund/Re-open
Scheme Subscription/Open for Allotment/Refund/Re-open Delay
Schemes other than 15%
15 Days 5 business days
ELSS p.a.
15%
Schemes ELSS 30 Days 5 business days
p.a.
Invest/Redeem at any
Open-ended Scheme Re-open- 5 business day
time
It has fixed maturity
Close-ended scheme No re-opening day
period
2. Statement of account is to be sent to investors:
Particulars Days
In the case of NFO Within 5 business days
In the case of post-NFO
investment Within 5 working days
In the case of SIP / STP /
SWP within 10 working days
On specific request by
investor within 5 working days without any cost
Dormant investors 6 months (Half yearly)
Soft copy Every month
Across mutual funds based on PAN of the investor, to be
Consolidated Statement of
sent to the investor for each calendar month in which there
Accounts (CAS)
are transactions in the folio
3. Units of all mutual fund schemes held in De-mat form are freely transferable.
Only in the case of Equity Linked Savings Scheme (ELSS), free transferability of
units (whether in De-mat or physical form) is curtailed for the statutory
minimum holding period.
4. Investor can ask for a Unit Certificate for his Unit-holding. This is different
from a Statement of Account
5. Unit Certificates are non-transferable - issue the Unit Certificate within 5
working days of receipt of request.
6. NAV shall be calculated on the daily basis and disclosed on the website of
AMFI and the mutual fund. (NAV declares Monday to Friday and rest are non-
business day)
7. Nominee - The investor/s can appoint up to 3 nominees. (Investor wish to
update NO Nominee also)
8. Individual investor can update up to 5 Banks under folio
9. POA (Power of Attorney) cannot be appointed as a nominee.
10.The investor can also pledge the units. This is normally done to offer security
to a financier. (AMC approval not required)
11.Dividend warrants have to be dispatched to investors within 30 days of
declaration of the dividend.
12.Redemption/re-purchase cheques would need to be dispatched to investors
within 10 working days from the date of receipt of transaction request.
13.In the event of delays in dispatching dividend warrants or
redemption/repurchase cheques, the AMC has to pay the unit-holder, interest
at the rate of 15 percent p.a.
14.NAV for FOF declares at 10 am and others schemes before end of the day.
15.NAV is disclosed in 2 newspapers. (English and Regional Language)
16.Investor can choose to hold units DIRECT or REGULAR (i.e. Broker)
17. The AMFI Code of Ethics (ACE) sets out the standards of good practices to be
followed by the Asset Management Companies in their operations and in
their dealings with investors, intermediaries and the public
18. AMFI Guidelines & Norms for Intermediaries (AGNI)), consisting of
individual agents, brokers, distribution houses and banks engaged in selling of
mutual fund products.
19.The intermediary has a right of appeal to AMFI (intermediary means MF
broker/distributors
20.75 percent of unit holders can terminate the appointment of an AMC
21.If an investor feels that the trustees have not fulfilled their obligations, then
he can file a suit against the trustees for breach of trust
22.SEBI has permitted celebrity endorsements at industry level for the purpose
of increasing awareness of Mutual Funds as a financial product category. The
celebrity endorsements shall not promote a scheme of a particular Mutual
Fund.
23.MF has to deployed unclaimed dividend/redemption amount in the Money
Market and in separate plan of Liquid scheme.
Right to unclaimed amounts
If the investor claims the money within 3 If the investor claims the money
years, then payment is based on after 3 years, then payment is
prevailing NAV i.e. after adding the based on the NAV at the end of 3
income earned on the unclaimed money years
E.g.1 Investor amount was transferred to unclaimed scheme on 1st Jan 2015 and
claimed this money on 31st Dec 2016 that time NAV was 50/- So investor will get
his money back as per Rs. 50/- (Claimed before 3 Years)
E.g.2 Investor amount was transferred to unclaimed scheme on 1st Jan 2015 and
claimed this money on 31st Dec 2020 that time NAV was 100/- and till 31st Dec
2017 NAV was 70/- So investor will get his money back as per Rs. 70/- not as per
100/- (Because claimed after 3 years)
Note: Investor gets FOLIO Number if they invest in MF and get equivalent number
of UNITS the amount they invest.
