Before starting why is it important to know the organisation structure of mutual fund? As it is the only source to understand how a mutual fund works, or who controls the mutual fund.

Also, if the investors know the hierarchy of a mutual fund, they will know whom to escalate the problem if necessary.

What is “Mutual Fund”? It is termed as a type of business where there are 30-40 no’s fund houses. The fund house is the number of companies approved by SEBI to operate mutual fund schemes. This are the schemes which the common people buy and sell as investment products.

To have a clearer picture regarding mutual fund operates, we should know in-depth about the organization structure of a typical mutual fund house in India.

Three-tier structure of Fund House are listed below:

  • Sponsor
  • Trustee
  • AMC

The SEBI is responsible for creating these above mention tires of Mutual funds. All Mutual funds in India are carried out with SEBI guidelines.

1. Sponsor – The sponsors or also called as promotors are the first who conceptualizes the starting of the mutual fund business. Before starting the business, they must approach the SEBI for registration of the business. If the sponsor has all the necessary documents required, the SEBI will issue the “Certification of Registration” to sponsor. The requirements of the sponsor include

  • The sponsor must have 5 years of financial services.
  • There must be a profit-making company (3 out of 5).
  • The net worth of the company for the last five years must be positive.

2.Trustee – The promotors of mutual fund form a trust. This trust must have a “Board of Trustees”(like a board of directors). They must act like a (BOT) Board of Trustees. There are specific rules and conditions of SEBI which must be followed in the BOT. The minimum strength of the board should be four members.

From the board of members, there must be “Independent Directors”. The members who don’t have a direct relationship with the sponsors in any way.

SEBI has stipulated such strict rules and regulations related to the Board of Trustees because generally corporate houses are the sponsors of mutual fund schemes. SEBI follows the strict norms to ensure that the pooled money is not used by the sponsors in their group companies.

3. AMC – The Manager of Mutual Fund companies is formed as per the “Companies Act 1956”. The AMC should be registered with the Governm3nt of India accordingly. This is the only reason why we see the following types of AMC’s in India.

  • Private Limited Company.
  • Wholly Owned Subsidiary of an already Public Limited Co.
  • Joint Venture (Indian or Overseas Companies).


The time the mutual fund house has structured its 3 tiers as per the SEBI’s guidelines, the AMC is ready to launch its new schemes. This is the only stage where the mutual fund house is ready to appoint a competent fund manager.

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The Share Market A Guide to Trading (2)

The Share Market: A Guide to Trading – Gill Broking

It is, therefore, important to learn both the pros and cons of intraday trading to get a better idea of how this market works and how exactly you can grow your money. In this post, we will walk you through a few advantages and disadvantages of intraday trading. So, keep reading to learn more.

• Beware of fixed/guaranteed/regular returns/ capital protection schemes. Brokers or their authorized persons or any of their associates are not authorized to offer fixed/guaranteed/regular returns/ capital protection on your investment or authorized to enter into any loan agreement with you to pay interest on the funds offered by you. Please note that in case of default of a member claim for funds or securities given to the broker under any arrangement/ agreement of indicative return will not be accepted by the relevant Committee of the Exchange as per the approved norms.
• Ensure that pay-out of funds/securities is received in your account within 1 working day from the date of pay-out.
• Be careful while executing the PoA (Power of Attorney) – specify all the rights that the stock broker can exercise and timeframe for which PoA is valid. It may be noted that PoA is not a mandatory requirement as per SEBI / Exchanges.
• Register for online applications viz Speed-e and Easiest provided by Depositories for online delivery of securities as an alternative to PoA.

• Do not keep funds idle with the Stock Broker. Please note that your stock broker has to return the credit balance lying with them, within three working days in case you have not done any transaction within last 30 calendar days. Please note that in case of default of a Member, claim for funds and securities, without any transaction on the exchange will not be accepted by the relevant Committee of the Exchange as per the approved norms.

• Check the frequency of accounts settlement opted for. If you have opted for running account, please ensure that your broker settles your account and, in any case, not later than once in 90 days (or 30 days if you have opted for 30 days settlement). In case of declaration of trading member as defaulter, the claims of clients against such defaulter member would be subject to norms for eligibility of claims for compensation from IPF to the clients of the defaulter member. These norms are available on Exchange website at following link: NSE, MCX

• Brokers are not permitted to accept transfer of securities as margin. Securities offered as margin/ collateral MUST remain in the account of the client and can be pledged to the broker only by way of ‘margin pledge’, created in the Depository system. Clients are not permitted to place any securities with the broker or associate of the broker or authorized person of the broker for any reason. Broker can take securities belonging to clients only for settlement of securities sold by the client.

• Always keep your contact details viz. Mobile number/Email ID updated with the stock broker. Email and mobile number is mandatory and you must provide the same to your broker for updation in Exchange records. You must immediately take up the matter with Stock Broker/Exchange if you are not receiving the messages from Exchange/Depositories regularly.

• Don’t ignore any emails/SMSs received from the Exchange for trades done by you. Verify the same with the Contract notes/Statement of accounts received from your broker and report discrepancy, if any, to your broker in writing immediately and if the Stock Broker does not respond, please take this up with the Exchange/Depositories forthwith.

• Check messages sent by Exchanges on a weekly basis regarding funds and securities balances reported by the trading member, compare it with the weekly statement of account sent by broker and immediately raise a concern to the exchange if you notice a discrepancy.

• Please do not transfer funds, for the purposes of trading to anyone, including an authorized person or an associate of the broker, other than a SEBI registered Stock broker.

• Do not deal with unregistered intermediaries (who are not registered with SEBI/Exchanges).

Names and contact details of all Key Managerial Personnel including Compliance Officer

Sr. No.Name of the IndividualDesignationContact NumbersEmail Id
1 Charanpreet GillCEO/MD011-40345555admin@gillbroking.com
2 Charanpreet GillWhole Time Director011-40345555gillbroking@gmail.com
3 Charanpreet GillCompliance officer011-40345555compliance@gillbroking.com
4Manpriya GillDesignated Director-1011-40345555manngill04@gmail.com
5Kewal GillDesignated Director-2011-40345555fvwealth@gmail.com

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