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REGISTRATION OF MUTUAL FUNDS

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The criteria for registration of mutual funds include: 

(i) There should be sound track record and general reputation of the sponsor;  [for the purpose of this clause “Sound Track Record” means the Sponsor should:

(a) be carrying on the business in financial services for a period of not less than 5 years; and

(b) the Networth is positive in all the immediately preceding 5 years.

(c) The Networth in the immediately preceding year is more than the capital contribution of the sponsor in AMC.

(d) the sponsor has profits after providing for depreciation, interest and tax in three out of immediately preceding five years, including the fifth year; And applicant is a fit and proper person] 

(ii) The fund should be in the form of the trust which must be approved by SEBI; 

(iii) The sponsor should contribute at least 40% to the net worth of the asset management company; 

(iv) The sponsor or any of the directors or principle officer of AMC:

i) Should not be guilty of any fraud or 

ii) has not been convicted of an offence involving moral turpitude or 

iii) has not been found guilty of any economic offence; 

(v) The trustees must be appointed in accordance with the provisions of the Act; 

(vi) The asset management company must be appointed in accordance with the provisions of the Act; 

(vii) The custodians must be appointed in accordance with the provisions of the Act.

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