Registration of Mutual Fund with SEBI

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With the help of the Legalraasta Consultant, get your mutual fund registered with SEBI. We help to build a mutual fund business, provide strategy and risk management advice, support for 5 years, and more.

  • Investing comfortably in the money market and government bonds
  • Start investment with a little amount
  • One-time investment and SIPs
  • Well-researched portfolios and funds for high returns
  • Form a Mutual fund company
  • Document analysis with the company’s directors
  • 5 years of Business plan
  • Mutual fund product strategy & Risk evaluation
  • Advice and Consultation on Application before the SEBI Board

Apply Now!

Apply Now!

Introduction to Registration of Mutual Funds with SEBI

A mutual Fund is authorized as a Trust which has sponsors, Trustees, an Asset Management Company (AMC), and a custodian. Sponsors and trustees are there to act as a promoter of a company. Furthermore, trustees operate their property for the advantage of the unitholder.

The management of the funds is the responsibility of the Asset Management Company (AMC), which is duly approved by the SEBI to invest the funds in different securities. The custodian who is registered with SEBI keeps in its custody the securities of various fund schemes. Trustees take care of Mutual Funds’ results and compliance with SEBI Regulations. Form-A (First Schedule of SEBI Mutual Funds Regulations) along with the non-refundable fee of Rs.5 Lacs must be completed by an applicant who is willing or proposing to sponsor the Mutual Fund.

The application is then further reviewed by the sponsors and, once the eligibility requirements have been met, it is properly passed from its further processing. After the fulfillment of the eligibility requirements of the Sponsors, the remaining formalities for the formation of a Mutual Fund are carried out, which includes, inter alia, the execution of the Trust Deed and Investment Management Agreement, the establishment of a trustee company or board of trustees consisting of two-thirds of independent trustees, the incorporation of the AMC, the donation of at least 40 percent of the net worth of the AMC and the contribution of at least 40 percent of the net worth of AMC. Accordingly, the registration certificate is issued subject to payment of the registration fee of Rs.25 Lakhs, after satisfying these requirements.

Meaning of Mutual Funds

The money raised from a number of investors involved in buying the securities, shares, or bonds of the company is mutual funds. These funds, shared by a variety of investors, are managed and supervised by a skilled fund manager so that they can achieve the highest returns possible. This is how it works, not just in India, but all over the world as well.

About SEBI-Securities and Exchange Board

The designated regulatory body for capital markets in India is the Securities and Exchange Board (SEBI). The Board’s primary role is to protect the interests of securities investors, to encourage and to control the securities market. By providing the requisite details, SEBI has laid the ground rules for investors to become aware of the functioning of mutual funds. They serve to simplify the wide range of mutual fund schemes that investors can sometimes find very confusing. The guidelines provided by SEBI on the merger and consolidation of mutual fund schemes aim to simplify the comparison process between the different mutual fund schemes offered by fund houses.

Types of Mutual Funds You Can Invest In

The division of mutual funds (MF) in India is done completely. There are different types of MF. They are as follows:

Based on Asset Class

  • Equity Funds: These are investments in stocks. Also known as Stock Exchanges.
  • Debt Funds: These invest in fixed security funds such as Water Funds, Bonds, Firm Maturity Plans, security and treasury funds, etc.
  • Money Market Funds: Usually, such funds are managed by the banks or corporations, and the government by distributing money market securities like bonds, dated securities, T-bills, etc.
  • Hybrid Funds: Also name Balanced Funds, is a mixture of stocks and bonds that close the gap between finance and debt financing.

Based on Investment Goals

  • Growth Fund: Such funds put an enormous part of the investment in shares and growth sectors. It’s frequently suitable for investors having a surplus of waste money.
  • Income Funds: These refer to the family of debt mutual funds. The cash is distributed during a mixture of bonds, certificates of securities, and deposits among others.
  • Liquid Funds: The utmost fund one can invest in it’s Rs. 10 lakhs. Additionally, it belongs to the category of debt fund because it invests within the debt market.
  • ELSS fund/tax-saving funds: These mutual funds are best-suited for salaried and long-term investors. Equity Linked Saving Scheme (ELSS) serves investors with the double advantage of building wealth. Moreover, it also saves on taxes with a rock bottom lock-in period of three years only.
  • Aggressive Growth Funds: These are designed to make steep financial gains.
  • Capital Protection Funds: This kind of mutual fund assists the objective of protecting your principal while getting relatively smaller returns.
  • Fixed Maturity Funds: These take down the tax stress on the investors investing in securities, bonds, money market, etc.
  • Pension Funds: In this case, the applicant puts part of his or her income into a designated Pension Fund. This will expand for a long time.

Based on Structure

  • Open-ended Funds: These funds aren’t compelled in several units or time-periods. Moreover, the investor has the option to trade funds at his own preference and exit when they need at the NAV (Net Asset Value).
  • Close-ended Funds: The unit capital to invest is fixed already. Therefore, one cannot sell extra than a pre-agreed number of units.
  • Interval Funds: This mutual fund has features of both open and closed-ended funds. No transaction is permitted for at least two years.

Based on Risk

  • Very Low-Risk Funds: Such funds could also be wont to fulfill short-term financial goals and keep the investor’s money safe while returns are less.
  • Low-Risk Funds: Investors put their money in either one or the mixture of liquid, arbitrage or ultra-short-term funds.
  • Medium-Risk Funds: As the manager invests a bit in debt and the rest in equity funds, hence, the risk part is of average level.
  • High-Risk Funds: Suggested for investors without any risk of aversion and those who try big returns in the kind of dividends and interest, etc.

Specific Mutual Funds

These involve sector funds, index funds, funds of funds, emerging market funds, and asset allocation funds.

Main Conditions Under SEBI (Mutual Funds) Regulations, 1996

The accompanying is the eligibility criteria for grant of a certificate of registration as per Regulation 7 of SEBI (Mutual Funds) Regulations, 1996. For the aim of the grant of a certificate of registration, the applicant has got to fulfill the subsequent, namely:-

Application to Register

The applicant is required to apply for registration on Form A provided for in Schedule I of the 1996 SEBI Regulations (Mutual Funds). It may be noted here that in terms of the Act. 7(c) of the Regulations, any person who owns 40 percent or more of the asset management company’s total assets is considered to be a sponsor and is required to submit an application on Form A.

When you apply, please ensure that the main objectives of the sponsoring company memorandum allow for the activities of the partnership fund to continue. The applicant must also submit the following additional details of the sponsor and other shareholders to the proposed asset management company.

A complete list of your group / affiliated companies registered with SEBI for any position, also shows how registered they are with the SEBI registration number. In the case of foreign sponsors, details of the registration of sponsors / any affiliated companies/groups, or any overseas regulatory agency. You may also refer to the SEBI (Mutual Funds) Regulations for the meaning of ‘Associates’, ‘group’, and ‘control’. That any sponsor or group / affiliated company is included in any known stock transaction in India. If so, please provide details.

Whether the sponsor or its group/associate companies are listed on any of India’s recognized stock exchanges. Please, if so, include the info.

Whether there have been any instances of infringement or non-compliance by a regulatory agency in India or abroad with any securities-related regulations and whether any action against you or any of your associate/group companies in this regard has been taken(please provide the following information).

  1. The top ten fines in the case of foreign companies and all monetary fines in the case of Indian businesses, imposed on a sponsor or any sponsor (for misconduct/breach of financial services sector or due to errors in respect of shareholders/debtors and investors, by any regulatory body finance or government official or remuneration paid to any financial regulatory body for the past five years and details thereof. Penalties imposed on economic charges may only be disclosed in the presence of a sponsor.
  2. Details of all cases of suspension and cancellation of the certificate of registration (misconduct/breach of financial services sector or inconsistent with shareholders, loan holders, and depositors) of the sponsor or other sponsor will be disclosed 10 years ago.
All disclosures of penalties and actions taken in terms of (a) and (b) above for foreign companies may be limited to the administration of the country where the main functions (for-profit/income) of the sponsors / related companies are performed or where headquarters is located.

Proclamation in terms of Regulation 7 (d) of the Security Regulations and the Mutual Funds’ Exchange Board, 1996 that your sponsoring company or one of your directors has not been found guilty of fraud or has not been convicted of any misconduct or criminal misconduct. In such cases, full details should be provided

  1. Particulars of registration of your companies / affiliated companies/groups, registered/required to be registered with the Reserve Bank of India (RBI) as a Bank or NBFC Companies or any other employee.
  2. Details of the disciplinary action taken by the RBI against you or any of the group / s companies you are involved with. Please also let us know if there is a discrepancy in the payment of your investment by you or any of your group / personal companies.
  3. Details of the RBI’s consent, if any, for the purpose of funding the partnership fund.

Who are the directors or employees of your company or corporate / affiliated company have been associated with any other organization such as the director or employee SEBI initiated the act of suspension or cancellation of registration certificate or commenced any action under the provisions of the SEBI Act or introduced any prosecution for actions committed during their meeting. If so, please provide details.

The application will be accompanied by a business plan.

To take money from a donor to provide AMC with additional funds, if necessary, to the extent that it is performing its functions, to protect the interests of the unemployed.

Onsite Due Diligence of Sponsor by SEBI

To research the following, SEBI can perform an on-site due-diligence of the sponsor’s established businesses:

SEBI Guidelines on Mutual Funds

  1. At any stage of registration, the requester must provide all the required information within 30 days from the date of receipt of any communication from SEBI for the stated purpose, otherwise, the case may be deemed to have been closed by SEBI.
  2. SEBI will evaluate the application and send a link to you regarding your eligibility status. If you qualify, you will need to take the following steps within 12 months from the date of contact, otherwise, you will need to submit a new application:

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Frequently Asked Questions

The mutual fund is a wealth pooling platform for issuing units to investors and investing funds in securities in line with the objectives set out in the offer document. Securities investments are dispersed through a large cross-section of industries and sectors and therefore the risk is minimized.

A mutual fund is set up in the form of a trust, which has a sponsor, trustees, asset management company (AMC), and custodian. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. For more details visit our website Legalraasta.

For mutual funds, contact our expert team. For extra major details visit our website Legalraasta or you can call us on 8750008881.

The most important documents required are phone number, mail id, and address proof of the applicant. Moreover, mention the for more details call us on 8750008881.

Legalraasta will give end to end help when it comes to the mutual fund registration procedure, and it will solve all the queries related to this process in no time.

Mutual Funds recruit full-time experts with the expertise and experience to handle the vast pool of cash generated by the Mutual Funds. Before making the investment for their clients, Fund Managers evaluate the stock and the demand.

A mutual fund’s Net Asset Value (NAV) is the price at which the units of a mutual fund are purchased or sold. That is the fund’s market value after its liabilities have been deducted.

Yes, NRIs may invest in mutual funds, and the schemes’ offer document provides details on how NRIs may subscribe to India’s mutual fund schemes.

The transfer of units is required, in accordance with the SEBI Regulations, to take place within thirty days of the date on which the certificates are lodged with the mutual fund.

At the time of winding-up of a scheme, after cost adjustment, the mutual funds pay an amount dependent on the prevailing NAV. Unitholders are required to obtain a report from the mutual funds on the liquidation, which includes all the necessary information.


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