Section 7 – Investor’s Rights And Obligations

Table of Contents

Investors Rights

1. Investor can invest in a New Fund Offer (NFO)/ Post NFO period and mutual fund has to provide services like unit allotment, refund, account statement etc. to the investor as per Service Standards of a Mutual Fund towards its Investors.

2. NAV of a scheme shall be calculated and published on the website of AMFI and the Mutual Fund. Mutual funds shall also send latest NAV to investor through SMS if requested.

3. An investor can appoint up to 3 nominees (in case of investor’s demise) along with the distribution percentage. If no percentage specified, units will be distributed equally.

4. Units of a mutual scheme can be pledged as security against loan taken by investor.

5. Dividend Warrants must be sent to the investor within 30 days of dividend declaration.

6. Redemption cheques must be sent to the investor within 10 days of receipt of redemption request.

7. If there is delay in sending redemption cheques or dividend warrants, interest @ 15 percent has to be paid. This interest cannot be charged to the scheme.

8.  Unit holders have a right to beneficial ownership in the scheme’s assets.

9. Investors can change their distributors or invest in a direct format. They do not need to provide a No Objection Certificate to Mutual Fund from existing distributor.

10. If an investor chooses to, he can hold mutual fund units in dematerialized form. The mutual fund will coordinate with RTA and Depository Participant.

11. Mutual Funds shall, within 10 days of end of half year (31stMarch and 30th September), send to investor a complete statement of its scheme portfolio.

12. Unitholders can inspect Trust Deed, Investment Management Agreement, Custodial Service Agreement, RTA Agreement, Memorandum of Association & Articles of Association of the AMC.

Investor obligations

1.Investors must provide PAN (Permanent Account Number) and must complete formalities of KYC (Know Your Customer).

2. All investor must provide bank account details with the redemption requests.

Investor Grievances & redressal Mechanism

If an investor has a complaint against a registered Mutual Fund or a company or any other intermediary registered with SEBI, he can go to Investor Service Centre of that entity. They can also contact senior officials in the AMC. If investor’s complaints are still not resolved, they can write to SEBI.

If there are pending investor complaints, SEBI may refuse to grant permission to AMC to launch a new scheme.

Offer Document of a scheme mentions number of investor complaints received and number of complaints redressed.

SEBI has provided a centralized web-based complaints redress system on its portal, named ‘SCORES’. If an investor is not getting satisfactory response from the mutual fund against their complaint, a complaint can be lodged online with and subsequently view its status on ‘SCORES’ portal.

A person aggrieved by SEBI’s ruling can file an appeal with Securities Appellate Tribunal (SAT).

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