Investor Services by Mutual Funds

8/14/2019 Investor Services by Mutual Funds

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INVESTOR SERVICES BY MUTUAL

FUNDS

Applying and Redeeming for

Mutual Fund Units Investment Plans and Services


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IMPORTANCE OF INVESTOR

SERVICE Besides good returns of funds

Most important advantage of MFisCONVENIENCE

Depends upon

type of service provided variety of service provided


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PROCEDURE FOR PURCHASE OFPROCEDURE FOR PURCHASE OF

UNITSUNITS

Read the Offer Document Description of the procedure for

purchase of units acceptable mode and permissible places

of payment

Refer Key Information Memorandum(KIM) Application form

Salient features of schemes

Only KIM contains Application form and not ODOnly

KIM contains Application form and not OD


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Submission of application form to

Collection Centres AMC offices

Registrars accept new subscriptionsand redeem from investors.

MF may own Investor Service Centres

Payment is through Cheque / DemandDraft / Cash (in certain cases), Internetcan be used to transfer funds


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FOR NRIs

RBI has given permission to all MFs to sell units

to NRIs / OCBs/ Foreign entities

Companies need to submit Board resolutions,

memorandum and articles of association with

application forms

Mode of Payment: For repatriation benefits- DDs or cheques using FCNR

account / NRE account

Non repatriation benefits- DDs or cheques on

NRO/NRSR accounts


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REDEMPTION

OD contains place where redemption noticemust be sent

Investors have to deal with registrars or

Investor service centres Payment is through cheque, ECS to bank

account For NRIs and OCBs: ECS to to NRE or US

Dollar draft at current exchange rateIf investment was on repatriable basis

Else - Rupee cheque in favour of investorsNRO, NR/SR account


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SERVICES

Automatic Reinvestment plan: There are two options: Dividend & Growth ARP is also called Growth option allows investor to reinvest in additional units

the amounts of dividends or other distributions they do not receive dividends Reinvestment takes place at ex-div NAV Investor reaps benefit of Compounding Some funds allow reinvestment in other

schemes of same fund family.


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Automatic Investment plan:

Invest a fixed sum periodically

Investors save in a disciplined and

phased manner Investment mode would be direct

debit to Investors salary or Bank

account Investor get the benefit of Rupee cost

averaging


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Allows Investor to make Periodicwithdrawals from Fund Investment accounts

Amount withdrawn is treated as redemptionof units at the applicable NAVs

They are different from MIPs, because MIPspay the income generated on regular basis,without touching the capital.

Hence, Dividend Tax is not levied on SWP,whereas it is levied for MIPs with more than50% in debt.

Systematic Withdrawal PlanSystematic Withdrawal Plan


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Allows investor to transfer on a periodicbasis a specified amount from onescheme to another within same fund

family. The redemption or investment will be at

applicable NAV It is necessary to maintain a minimum

balance under both the schemes. The service allows the investor to

manage his Investments actively toachieve his objectives

Systematic TransferPlans


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OTHER INVESTOR SERVICES

Phone transactions:

Investors may telephonically redeemor purchase units.

The telephone instructions arepossible in case of the funds that

keep investment accounts, ratherthan issue certificates.


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Account statement show units purchased,redeemed or transferred between schemes,distributions and reinvestments and investors

current holding in units and in amount. SEBI regulations require funds to send annual

financial statements to unit holders within sixmonths of close of accounting year

If a fund has deducted tax at source fromincome distributed to the investors, it wouldalso issue TDS statement.

Periodic statements andTax information:


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Loans against units: Several banks lend to the investors

against mutual fund units held by them. The amount is usually a percentage of

the value of the value of the Investorsholding in Units

SEBI prohibits MFs to give loans


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Nomination facility is available forOpen end Funds and Close End

Funds not listed on SE.The benefits passes to the nominee

In case of Close Ended schemes

listed on SE same procedure asShare transfer is followed

Documents

Investor Services by Mutual Funds