
Collective Investment Schemes: According to SEBI “Any scheme or arrangement made or offered by any company under which the contributions, or payments made by the investors, are pooled and utilized with a view to receive profits, income, produce or property, and is managed on behalf of the investors is a Collective Investment Schemes (CIS)
Collective Investment Management Company:
A Collective Investment Management Company is a company that is registered with SEBI under the SEBI (Collective Investment Schemes) Regulations, 1999, whose object is to organize, operate and manage a Collective Investment Scheme
However, following arrangements do not constitute a collective investment scheme:
1. By co-operative societies:
Any scheme or arrangement made or offered by a co-operative society or a society being a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State
2. By non-banking financial companies:
Any scheme or arrangement under which deposits are accepted by non-banking financial companies
3. Insurance:
Any scheme or arrangement which being a contract of insurance to which the Insurance act is applicable.
4. Under EPF act:
Any scheme or arrangement providing for any Scheme, Pension Scheme or the Insurance Scheme framed under the Employees Provident Fund and Miscellaneous Provisions Act, 1952
5. Deposits under Companies act:
Any scheme or arrangement under which deposits are accepted under the provisions of companies act
- Any scheme or arrangement under which deposits are accepted by a company declared as a Nidhi or a mutual benefit society under sections of the companies act
- Chit fund act:
Any scheme or arrangement falling within the meaning of Chit business as defined in clause (d) of section 2of the Chit Fund Act, 1982
8. Mutual fund:
Any scheme or arrangement under which contributions made are in the nature of subscription to a mutual fund
Collective Investment Schemes (CIS) Process:
- A company should 1st get itself registered with SEBI as a Collective Investment Management Company. After successful registration, a certificate will be issued.
- Then the company can come up to the public with the schemes they would like to make the investment on
- The company should ensure that the schemes launched are credit rated as well as appraised by an appraising agency.
- An offer document shall be made by the company and copy has to be filed with SEBI for which SEBI will respond within 21 days suggesting any modifications it wants to.
- If SEBI has suggested no modification within 21 days from the date of filing, Collective Investment Management Company can issue the offer document to the public for raising funds from them.
- After collection of funds, within two months from the closure of the financial year the company has to provide the investors with a copy of the summary of the yearly appraisal report, Profit & Loss account and balance sheet.
- Also the company should ensure that within two months from the date of finalization of accounts scheme wise annual report or an abridged form thereof has published in a national daily
- Within one month from the close of each quarter, scheme wise un-audited quarterly financial results have to be published in a national daily.
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