For mutual fund investing in India, there are some rights set by SEBI which the mutual fund investors enjoy. To regulate the investment process of mutual fund schemes in India, the mutual fund company in India has to follow some rules and regulations. So, there are certain rights that are guaranteed to the mutual fund investors in India. But in most of the cases, mutual fund investors are not aware of the mutual fund rights as per SEBI’s guidelines. Though the mutual fund investors in India must know their rights when opting for mutual fund investing in India.
Following are the mutual fund rights which the mutual fund investors in India must know-
Mutual Scheme Related Documents
Before mutual fund investing in India, you must read all the documents related to the mutual fund schemes in India. The mutual fund investors in India must go through Scheme Information Documents (SID) and Key Information Document (KIM) which gives complete information regarding the fund and the mutual fund company in India. After you have invested in mutual fund schemes in India, in case there is any change in the documents, that particular mutual fund company in India must inform you about it.
Redemptions & Dividend Payout
Many mutual fund investors in India are not aware of the dividend and redemption proceedings. After the fund house declares the dividend, the mutual fund investors must receive the dividend within 42 working days. Ans he/she must receive the repurchase or redemption proceedings within 10 days of repurchase or redemption.
Certificate from the Mutual Fund Company in India
When the mutual fund investors buy the fund units, then he/she must get certificate from the mutual fund company in India stating the no.of units you own. But if you do not receive it within 6 months of your investment date, then you can question the fund house for the delay.
Change in the Attributes of the Scheme
The mutual fund investors have full right to know all the details of fund objective, fund performance and where your money is being invested. You can exit the fund without paying any exit load in case there is any fundamental change. The change in scheme attributes includes- reducing equity exposure to 65%, changing equity fund to debt, the risk profile of the fund changes and investment instrument change for the investment.
Periodic Updates & Annual Reports
The mutual fund company in India provides a monthly update of your investment portfolio and transactions to the mutual fund investors. Also, they receive annual reports and statement of your portfolio investment. The mutual fund company in India also publish the details of their portfolio in newspapers and adds.
Vote for Approval or Disapproval
The mutual fund investors can vote for either agree or disagree to any fundamental attribute change for or against the mutual fund scheme. Also, the investors can wind-up the scheme in case almost 75% or more investors pass a resolution. In a special gathering, if around 75% of the total mutual fund investors or unit-holders of an AMC vote against it, then that AMC can be terminated.
Complaint Redressal System
The mutual fund investors can complain or place any of his/her queries to the assigned investor grievance cell of the particular fund house. If it doe not get resolved, then he/she can approach to SEBI or AMFI.
After mutual fund investing in India, you can expect NAV publication daily for most open-ended schemes and periodically for the close-ended schemes. To achieve the best interests of the mutual fund investors, the AMC must standby the Code of Ethics for the investment decisions. Also, the fund house must disclose the asset allocation policies, fund holdings, expenses and much more.