Answering All Your Questions About the Structure of Mutual Funds In India

Mutual funds are highly effective and low-risk investment options in India. This comfort of low risk becomes possible due to a long chain of professionals do their job diligently for investments. The mutual fund investment plans are designed and implemented by an Asset Management Company. The company includes a team of professionals who have immense knowledge of the market and investment. The investors get to invest in the plan according to the provided agreement and use their money for diversified investment.

With a long chain of commands, the plans work smoothly and securely. However, the investors desire to understand the structure and the role that the professionals fulfil. For them, this article answers all the associated questions.

1. What do trustees do for mutual funds?

A team of trustees handles various jobs in an Asset Management Company. First of all, it is their job to appoint the company and help in executing the agreement associated with investment management. This agreement helps in keeping the investors protected in terms of their rights and money. Apart from that, it is the trustees who take care of appointing a custodian.

2. What is the significance of the Asset Management Company?

An asset management company fulfils the daily requirements of managing the assets of the investors. The company handles the operations that are required on a daily basis and manages the schemes. The company works regularly to maintain a clear record of the investors along with their investments. Various professionals are appointed in such companies to manage each and every task smoothly.

3. What is the job of a custodian?

A custodian is appointed by the trustees of the company. The main purpose of the custodian is to ensure the safety and protection of the mutual fund investment plans. It is the custodian that protects the securities that come under the range of a particular mutual fund plan. The job also includes handling the rights of the companies, looking at the bonus, and regularly monitoring the dividends that come under a scheme.

4. How do registrar and transfer agent help?

When it comes to maintaining the list of unitholders from multiple schemes, the registrar, and the transfer agent come into the picture. The documentation related to the information of the investors are also handled by the RTA. The informational pieces such as the purchase, switch, and sale are handled by the registrar and transfer agent. Along with that, it is the RTA that provides multiple locations for the services with the branches.

5. Where do the agents and distributors fit in?

The role of the agents is about informing people about the mutual fund plans and providing necessary services for the investors. These services include the purchase, switch and others related to the different mutual fund plans. The queries of the investors are resolved by the agents who take care of the processes such as the nomination change, address change, KYC updates and others.

Thus, it would not be wrong to say that all the authorities work as a guide for the investors in terms of mutual fund investment plans.

Mutual fund investment offers a wide range of investment funds such as Equity Funds, Debt Funds, Income Funds & ELSS Funds to meet your financial goals.