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Chapter 4: Legal and Regulatory Framework

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This chapter explores the legal and regulatory framework governing mutual funds in India. Understanding this framework is essential for mutual fund distributors as it provides the foundation for all mutual fund operations and investor protection measures. We will examine the role of various regulators, with a special focus on SEBI and its regulations for mutual funds.

Chapter Summary

  • India has four main financial regulators: RBI, SEBI, IRDAI, and PFRDA, each with specific jurisdictions.
  • SEBI is the primary regulator for mutual funds and securities markets in India.
  • SEBI (Mutual Funds) Regulations, 1996, with subsequent amendments, govern mutual fund operations.
  • SEBI regulations cover various aspects including scheme documents, registration, risk management, disclosures, governance, NAV calculation, and investor rights.
  • Total Return Index (TRI) is mandated as the benchmark for mutual fund performance comparison.
  • Unitholders have specific rights, including the right to exit without load if fundamental attributes change.
  • 75% of unitholders can terminate an AMC or wind up a scheme.
  • SCORES is SEBI's online system for investor grievance redressal.
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