Reliance mutual fund structure, amc structure

1. STRUCTURE – RELIANCE MUTUAL FUND By Gagan Pareek Parvez Rangwala Sainatth Wagh 1/1/2010 Welingkar Inst of Management and Development 1

2. Mutual Fund ? “A mutual fund is a company that pools money from many investors and invests the money in stocks, bonds, short-term money-market instruments, other securities or assets, or some combination of these investments. The combined holdings the mutual fund owns are known as its portfolio. Each share represents an investor's proportionate ownership of the fund's holdings and the income those holdings generate “

4. Average Assets under Management: 1,02,179 Cr

5. Investor Count : 73 Lakh Folios

6. Presence in 159 Cities across country

7. 14 years of extensive market experience, 35 schemes combined with a strong performance track record.

9. 47 Funds  RCAM 1/1/2010 Welingkar Inst of Management and Development 5

10. Trustee Reliance Capital Trustee Co. Limited (RCTC), a company incorporated under the Companies Act, 1956, has been appointed as the Trustee to the Fund vide the Trust Deed dated April 25, 1995 executed between the Sponsor and the Trustee. For Eg: OD says that RCTC has been appointed as the Trustee to “Reliance India Power Fund”, a Venture Capital Fund registered with the SEBI vide registration number IN/VCF/05-06/062 dated June 16, 2005 An application has also been filed for registration of “Reliance Venture Capital Fund” with SEBI. 1/1/2010 Welingkar Inst of Management and Development 6 AMC

12. Axis Bank

13. Citibank N. A.

14. Deutsche Bank AG

15. Development Bank of Singapore

16. HDFC Bank Limited

17. HSBC Bank

18. ICICI Bank Limited

19. IDBI Bank

20. Ing Vysya Bank

21. Kotak Mahindra Bank

22. State Bank of India

23. Standard Chartered Bank

25. Role of AMC Transparency Liquidity Flexibility Decision Making Valuation Drafting of Structure of Scheme

26. CEO of AMC ensures fund complies with SEBI norms and investments made are in norms of Fund objectives as in OD Investment decisions made in interest of unit holders. Fund Managers ensure that investments are made in the interest of Unit holders and as per the norms and objectives of FOD AMC shall not utilize the services of Sponsor for purchase of new securities AMC reports data to both SEBI and Trustees. The RCAM shall not invest in any of its schemes unless full disclosure of its intention to invest has been made in the offer documents Decision are taken by team comprising of Fund Managers Investment Committee Based on Research Report Market Intelligence Analysis of Macro and Micro economic indicators Market Trends 1/1/2010 Welingkar Inst of Management and Development 10 Duties and Obligations of the AMC

27. a) RCAM will be responsible for making, floating, issuing Schemes for the Trust after approval of the same by the Trustees and SEBI as well as investing and managing the funds mobilized under various Schemes, in accordance with the provisions of the Trust Deed and SEBI Regulations. b) RCAM must disclose the basis of calculating the repurchase/redemption price and Net Asset Value of the various Schemes of the Fund to the investors, at such intervals as may be specified by SEBI and/or the Trustees and in accordance with the SEBI Regulations. c) RCAM must maintain books and records about the operation of various Schemes of the Fund to ensure compliance with the Regulations and guidelines for Mutual Funds as may be issued by SEBI from time to time, and shall submit a Scheme wise quarterly report on functioning of the Fund to the Trustee or at such intervals and in such manner as may be required or called for by the Trustee or SEBI. d) RCAM shall exercise all due diligence and vigilance in carrying out its duties and in protecting the rights and interest of the unit holders. e) RCAM will at all times ensure that the Trust Fund is segregated from assets of RCAM and assets of any other funds for which RCAM is responsible. f) RCAM shall submit to the Trustee all information concerning the operation of the various Schemes of the Fund managed by RCAM at such intervals and in such manner as required by the Trustee to ensure that RCAM is complying with the provisions of the Trust Deed and SEBI Regulations. 1/1/2010 Welingkar Inst of Management and Development 11 IMA and Duties of RCAM

28. Trustee main duties before Fund Launch: Systems in place for its back office, dealing room and accounting Appointed all key personnel including fund manager(s) for the Scheme(s) and submitted their bio-data which shall contain the educational qualifications, past experience in the securities market to SEBI, within 15 days of their appointment; (iii) Appointed Auditors to audit its accounts; (iv) Appointed a Compliance Officer to comply with regulatory requirement and to redress investor grievances; (v) Appointed Registrars and laid down parameters for their supervision; (vi) Prepared a compliance manual and designed internal control mechanisms including internal audit systems; and (vii) Specified norms for empanelment of brokers and marketing agents. The Trustees shall obtain the consent of the unit holders of the Scheme: (i) Whenever required to do so by SEBI in the interest of the unit holders; (ii) Whenever required to do so, on the requisition made by three-fourths of the unit holders of any Scheme under the Mutual Fund; (iii) When the majority of the Trustees decide to wind up the Scheme or prematurely redeem the Units 1/1/2010 Welingkar Inst of Management and Development 12 Duties and Obligations of the Trustees

29. Trust Deed Right to Obtain Information from AMC Monitors broker and AMC transactions Ensures AMC works as per SEBI regulations, 1996 Informs SEBI for 1 Lac Plus transactions Informs Unit holders and SEBI for change in structure and load if situation demands change Unit holders are given a option to Exit Change is advertised in Leading Newspaper Periodically review service contracts like Custodian documents Periodically Review Customer Complaints and Review. Appoint Statutory Auditors and have one Independent Director Due Diligence Signs the IMA with the AMC Keeps a check on Vacant Positions and nominates individual. Prescribe and adhere to a code of ethics by the Trustees, Asset Management Company and its personnel. 1/1/2010 Welingkar Inst of Management and Development 13 Duties and Obligations of the Trustees

30. The Custodian Trustee has appointed Deutsche Bank as Custodian Duties of Custodian: Provide post-trading and custodial services to the Mutual Fund; Keep securities and other instruments belonging to the Scheme in safe custody; Ensure smooth inflow/outflow of securities and such other instruments as and when necessary, in the best interests of the unit holders Be responsible for loss of or damage to the securities due to negligence on its part or on the part of its approved agents. The Custodian will charge the Mutual Fund, portfolio fee, transaction fee and out-of -pocket expenses in accordance with the terms of the Custody Agreement and as per any modification made thereof from time to time.

32. As Registrar to the Scheme KCPL will

33. accept and process investor's applications

34. handle communications with investors

35. perform data entry services

36. Dispatch Account Statements

37. other functions as agreed, on an ongoing basis.

38. The Registrar is responsible for carrying out diligently the functions of a Registrarand Transfer Agent and will be paid fees as set out in the agreement entered into with it and as per any modification made thereof from time to time.

39. Fees 1/1/2010 Welingkar Inst of Management and Development 16 AMC Fees : In terms of the Investment Management Agreement and the Regulations, the AMC is entitled to a management and advisory fee at the rate of 1.25% of the average daily net assets for net assets up to Rs.100 crore and at the rate of 1.00% for the net assets in excess of Rs.100 crore. For Schemes launched on a No- Load basis, the AMC is entitled to collect and additional management fee of up to 1% of the average net assets outstanding in each financial year and the total management fee shall not exceed the limit stated under the Regulation 52(6) of SEBI. Trust Fees: Pursuant to the Trust Deed constituting the Fund, the Fund is authorized to pay the Trustee, a fee for their services, in addition to the reimbursement of all costs, charges and expenses, sum computed at the rate of 0.05% of the amount, being the aggregate of the Trust Fund and Unit Capital of all the Schemes put together on 1st April each year or a sum of Rs.5 Lacs, which ever is lower or such other sum as may be agreed upon between the Settler and the Trustee from time to time. The Trustee may charge further fees as permitted from time to time under the Trust Deed and the Regulations.

40. Sponsor Loss Protection RCL contributes Rupees One Lac as the initial contribution to the corpus for the setting up of the Mutual Fund. RCL is responsible for discharging its functions and responsibilities towards the Fund in accordance with the SEBI Regulations. The Sponsor is not responsible or liable for any loss resulting from the operation of the Scheme beyond the contribution of an amount of Rupees one lakh made by them towards the initial corpus for setting up the Fund and such other accretions and additions to the corpus

41. Duties and Obligations of Investor Study of Offer Document In case of dividend declaration, investors have a right to receive the dividend within 30 days of declaration On redemption request by investors, the AMC must dispatch the redemption proceeds within 10 working days of the request. Investors can obtain relevant information from the trustees and inspect documents like trust deed, investment management agreement, annual reports, offer documents, etc. They must receive audited annual reports within 6 months from the financial year end. Investors have a right to be informed about changes in the fundamental attributes of a scheme. Fundamental attributes include type of scheme, investment objectives and policies and terms of issue. Investors can approach the investor relations officer for grievance redressal

42. Mutual Fund Cycle 1/1/2010 Welingkar Inst of Management and Development 19

43. MUTUAL FUND OPEARATION INVESTOR’S SERVICE PRODUCT DESIGN THE CHAIN OF OPERATION PRODUCT MARKETING FUND MANAGEMENT OUT SOURCING

45. SUPERIOR DESIGN

47. AGGRESSIVE MARKETING

49. MARKET TIMING

51. FLEXIBILITY

53. BETTER CONFIDENCE

55. 1/1/2010 Welingkar Inst of Management and Development 23 Thank You