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Collective Investment Scheme Registration

A Collective Investment Scheme (CIS), is an investment scheme in which several individuals come together to pool their money to invest in a particular asset(s) with the motive to share the returns derived from the said investment in accordance with the ag


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Introduction to Collective Investment Fund

A Collective Investment Scheme (CIS), is an investment scheme in which several individuals come together to pool their money to invest in a particular asset(s) with the motive to share the returns derived from the said investment in accordance with the agreement signed between them prior to pooling the money.

Amount or money received by the investor by a company which utilises these pooled contributions under a scheme or arrangement with a motive of receiving profits, income, property & is managed on behalf of the investors those arrangement or scheme is called as a collective investment scheme.

Control over the management and operation of such scheme or arrangement is not in the hand of investors.

As per SEBI ordinance 2014, any unregistered scheme or arrangement which pools Funds under this, involving a corpus amount of one hundred crore rupees or more shall be deemed to be a collective investment scheme.

What is not a Collective Investment Scheme

The following scheme are not to be treated as a collective investment scheme:

➲ Any scheme or arrangement made or offered by a co-operative society or a society registered under society act;

➲ Any scheme or arrangement under which any deposits are accepted by an NBFC

➲ Any scheme or arrangement, being a contract of insurance which falls under the provisions of the Insurance Act;

➲ Any scheme or arrangement providing for a Pension Scheme or the Insurance Scheme framed under the Employees Provident Fund and Miscellaneous Provisions Act, 1952

➲ Any scheme or arrangement under which deposits are accepted under section 73 to 76 of the Companies Act, 2013;

➲ Any scheme or arrangement falling within the meaning of Chit business as defined in clause (d) of section 2of the Chit Fund Act, 1982;

➲ Any scheme or arrangement under which contributions made are in the nature of subscription to a mutual fund;

Conditions for registration of Collective Investment Scheme

 Applicant must be a registered company as per the Companies Act, 2013 or previously applicable law

The company main objective mentioned in its MOA must specify the managing of a collective investment scheme

The applicant has a net worth of not less than rupees 3 crores at the time of making the application which shall be increased to rupees five crores within a period of three years from the date of the date of registration

SEBI grants such certificate to only fit and proper person.

There should be proper and adequate infrastructure to enable it to operate a collective investment scheme in accordance with the provision of these regulations;

➲ The directors and the key personnel of the applicant should be persons of honesty and integrity and shall possess having adequate professional experience in the related field

➲ The Directors and KMP of the applicant shall not have been convicted for an offence involving moral turpitude or for any economic offence or for the violation of any securities laws;

Half of the board member shall be consisting of the persons who are independent and are not directly or indirectly associated with the persons who have control over the Collective Investment Management Company;

No person who has been directly or indirectly connected with the applicant should have been refused registration in the past, by the Board under the Act.

What is a Collective Investment Management Company?

IT is a company incorporated under the provisions of the Companies Act, 2013 and registered with SEBI under the SEBI (Collective Investment Schemes) Regulations, 1999, whose object is to organise, operate and manage a Collective Investment Scheme.

A person (Company) which has obtained a certificate of registration in accordance with these regulations can carry on or sponsor or launch a collective investment scheme.

Application to the Board for the grant of registration shall be made in Form A by any person proposing to carry any activity as a Collective Investment Management Company on or after the commencement of these regulations.

Business Activities restricted for a collective investment Management Company:

The collective investment Management Company-

➲ Cannot perform any other activity other than managing the collective investment scheme

  • Cannot act as a trustee of any collective investment scheme
  • Cannot launch any collective investment scheme for the purpose of investing in securities
  • Cannot invest in any collective investment scheme floated by it.

➲ Cannot charge any fees on its investment in that collective investment scheme.

Compulsory condition needs to be followed by a collective investment management company

Prerequisites for registration of a Collective Investment Scheme are as follows:

➲ There has to be a minimum capital requirement (that is 3 crore initially which will grow to 5 crores in next 3 year from incorporation)

➲ It has prescribed certain corporate governance in the company.

➲ Independent director should be 50% of the total numbers of directors.

➲ There should be a trust

➲ The trustee and the directors of the applicant should be fit and proper person

➲ The type if the investment that they can make that has been prescribed along with a restriction on activities of a collective investment management company.

Participant of a Collective Investment Scheme

The collective Investment Management company

A Collective Investment Management Business is defined as a body formed pursuant to the company law of 1956 and further enlisting with SEBI pursuant to SEBI Regulations of 1999. The principal purpose of the body is to compose, run and deal with a collective investment scheme.


Fund Manager

A Fund Manager, a licensed and trained person concerned with management choices and decisions on mutual investment schemes. This person also provides trade reconciliation, appraisal and the evaluation unit of the strategy or action plan.



An person holding collective investment scheme property in trust is regarded as a trustee to support the unit holder. A trustee operates according to the appropriate rules and preserves the rewards only as the standards and guidelines ensure continuity. It is important that the CIS Regulations of 1999 set up a joint investment scheme as a trust. In this respect, the trust document will be a deed properly enlisted under the arrangements defined in compliance with the Indian Registry Act of 1908. For the trustees named in the instrument, a joint fund management firm begins this. Furthermore, such an entity or corporation may elect a trustee to represent its financial professionals and can take advantage of the mutual investment scheme.


For appointed trustees, the Collective Investment Management Firm shall supply the Board with the information stated in form C.



The shareholder is the individuals who contribute money in the mutual investment portfolio or are generally regarded as the shareholder. These owners must enjoy rights to the benefits of the plans and the associated remuneration or revenue provided by the contract or scheme.

Post Registration Compliance for a Collective Investment Company

➲ A Collective Investment Management Company registered with SEBI is eligible to raise funds from the public by launching schemes.

➲ A Collective Investment scheme has to mandatorily get a credit rating and shall also be appraised by an appraising agency.

➲ Trustees must approve such schemes and disclosures must be annexed, as provided in the Regulations, which would enable the investors to make an informed decision.

➲ The company must submit a copy of the offer document of the scheme with SEBI.

➲ If there is no suggestion of modifications is made by SEBI within 21 days from the date of filing of the offer document then the Collective Investment Management Company may issue the offer document to the public for the purpose of raising funds.

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