1. No scheme shall be launched by the asset management company unless such scheme is approved by the trustees and a copy of the offer document has been filed with the Board.

2. Every mutual fund shall along with the offer document of each scheme pay filing fees as specified in the Second Schedule.

1. The offer document shall contain disclosures which are adequate in order to enable the investors to make informed investment decision including the disclosure on maximum investments proposed to be made by the scheme in the listed securities of the group companies of the sponsor.

2. The Board may in the interest of investors require the asset management company to carry out such modifications in the offer document as it deems fit.

3. In case no modifications are suggested by the Board in the offer document within 21 working days from the date of filing, the asset management company may issue the offer document.

4. No one shall issue any form of application for units of a mutual fund unless the form is accompanied by the memorandum containing such information as may be specified by the Board.

1. The asset management company shall provide an option to the unitholder to nominate, in the manner specified in Fourth Schedule, a person in whom the units held by him shall vest in the event of his death.

2. Where the units are held by more than one person jointly, the joint unitholders may together nominate a person in whom all the rights in the units shall vest in the event of death of all the joint unit holders.

1. Advertisements in respect of every scheme shall be in conformity with the Advertisement Code as specified in the Sixth Schedule and shall be submitted to the Board within 7 days from the date of issue.

2. The advertisement for each scheme shall disclose investment objective for each scheme

The offer document and advertisement materials shall not be misleading or contain any statement or opinion which are incorrect or false.

Every close ended scheme shall be listed in a recognized stock exchange within six months from the closure of the subscription.

Provided that listing of close ended scheme shall not be mandatory -

1. if the said scheme provides for periodic repurchase facility to all the unitholders with restriction, if any, on the extent of such repurchase; or

2. if the said scheme provides for monthly income or caters to special classes of persons like senior citizens, women, children, widows or physically handicapped or any special class of persons providing for repurchase of units at regular intervals; or

3. if the details of such repurchase facility are clearly disclosed in the offer document; or

4. if the said scheme opens for repurchase within a period of six months from the closure of subscription.

1. The asset management company may at its option repurchase or reissue the repurchased units of a close ended scheme.

2. The units of close ended schemes referred to in the proviso to regulation 32 may be open for sale or redemption at fixed pre-determined intervals if the maximum and minimum amount of sale or redemption of the units and the periodicity of such sale or redemption have been disclosed in the offer document.

3. The units of close ended scheme may be converted into open ended scheme,-

   1. if the offer document of such scheme discloses the option and the period of such conversion; or

   2. the unitholders are provided with an option to redeem their units in full.

4. A close ended scheme shall be fully redeemed at the end of the maturity period.

   Provided that a close ended scheme may be allowed to be rolled over if the purpose, period and other terms of the roll over and all other material details of the scheme including the likely composition of assets immediately before the roll over, the net assets and net asset value of the scheme, are disclosed to the unitholders and a copy of the same has been filed with the Board.

No scheme of a mutual fund other than the initial offering period of any equity linked savings schemes shall be open for subscription for more than 45 days.

1. The asset management company shall specify in the offer document, -

   1. the minimum subscription amount it seeks to raise under the scheme; and

   2. in case of over subscription the extent of subscription it may retain.

Provided that where the asset management company retains the over subscription referred to in clause (b), all the applicants applying upto five thousand units shall be given full allotment subject to the oversubscription mentioned in clause (b).

2. The mutual fund and asset management company shall be liable to refund the application money to the applicants,-

   1. if the mutual fund fails to receive the minimum subscription amount referred to in clause (a) of sub-regulation (1);

   2. if the moneys received from the applicants for units are in excess of subscription as referred to in clause (b) of sub-regulation (1).

3. Any amount refundable under sub-regulation (2) shall be refunded within a period of six weeks from the date of closure of subscription list, by Registered A.D and by cheque or demand draft marked "A/C Payee" to the applicants.

4. In the event of failure to refund the amounts within the period specified in sub-regulation (3), the asset management company shall be liable to pay interest to the applicants at a rate of fifteen percent per annum on the expiry of six weeks from the date of closure of the subscription list.

The asset management company shall issue to the applicant whose application has been accepted, unit certificates or a statement of accounts specifying the number of units allotted to the applicant as soon as possible but not later than six weeks from the date of closure of the initial subscription list and or from the date of receipt of the request from the unit holders in any open ended scheme.

Provided that if an applicant so desires, the asset management company shall issue the unit certificates to the applicant within six weeks of the receipt of request for the certificate.

1. An unit certificate unless otherwise restricted or prohibited under the scheme, shall be freely transferable by act of parties or by operation of law.

2. The asset management company shall, on production of instrument of transfer together with relevant unit certificates, register the transfer and return the unit certificate to the transferee within thirty days from the date of such production.

3. Provided that if the units are with the depository such units will be transferable in accordance with the provisions of the Securities and Exchange Board of India (Depositories and Participants) Regulations, 1996.

No guaranteed return shall be provided in a scheme, -

1. unless such returns are fully guaranteed by the sponsor or the asset management company;

2. unless a statement indicating the name of the person who will guarantee the return, is made in the offer document;

3. the manner in which the guarantee to be met has been stated in the offer document.

1. A close-ended scheme shall be wound up on the expiry of duration fixed in the scheme on the redemption of the units unless it is rolled-over for a further period under sub-regulation (4) of regulation 33.

2. A scheme of a mutual fund may be wound up, after repaying the amount due to the unitholders,-

   1. on the happening of any event which, in the opinion of the trustees, requires the scheme to be wound up; or

   2. if seventy five per cent of the unit holders of a scheme pass a resolution that the scheme be wound up; or

   3. if the Board so directs in the interest of the unit-holders.

3. Where a scheme is to be wound up under sub-regulation (2), the trustees shall give notice disclosing the circumstances leading to the winding up of the scheme:-

   1. to the Board; and

   2. in two daily newspapers having circulation all over India, a vernacular newspaper circulating at the place where the mutual fund is formed.

On and from the date of the publication of notice under clause (b) of sub-regulation (3) of regulation 39, the trustee or the asset management company as the case may be, shall-

1. cease to carry on any business activities in respect of the scheme so wound up

2. cease to create or cancel units in the scheme;

3. cease to issue or redeem units in the scheme.

1. The trustee shall call a meeting of the unit holders to approve by simple majority of the unit holders present and voting at the meeting resolution for authorising the trustees or any other person to take steps for winding up of the scheme.

   Provided that a meeting of the unit holders shall not be necessary if the scheme is wound up at the end of maturity period of the scheme.

2.  

   1. The trustee or the person authorised under sub-regulation (1) shall dispose of the assets of the scheme concerned in the best interest of the unit holders of that scheme.

   2. The proceeds of sale realised under clause (a), shall be first utilised towards discharge of such liabilities as are due and payable under the scheme and after making appropriate provision for meeting the expenses connected with such winding up, the balance shall be paid to the unit holders in proportion to their respective interest in the assets of the scheme as on the date when the decision for winding up was taken.

3. On the completion of the winding up, the trustee shall forward to the Board and the unit holders a report on the winding up containing particulars such as circumstances leading to the winding up, the steps taken for disposal of assets of the fund before winding up, expenses of the fund for winding up, net assets available for distribution to the unitholders and a certificate from the auditors of the fund.

4. Notwithstanding anything contained in this regulation, the provisions of these regulations in respect of disclosures of half yearly reports and annual reports shall continue to be applicable 43*[until winding up is completed or the scheme ceases to exist.

After the receipt of the report under sub-regulation (3) of Regulation 41, if the Board is satisfied that all measures for winding up of the scheme have been complied with, the scheme shall cease to exist.