Mutual Fund History in India (1963)
Here you will know about, mutual fund history in India, India’s first Mutual Fund, first PSU Mutual Fund, first Private Mutual Fund, SEBI Regulatory and AMFI.
Unit Trust of India
Unit Trust of India (UTI) was established in 1963 by an Act of Parliament. It was set up by the Reserve Bank of India and functioned under the Regulatory and administrative control of the Reserve Bank of India.
It was the first step for mutual fund history in India
Unit Scheme 1964 – It was the first scheme launched by UTI. UTI had 6700 crores rupees of assets under management (AUM) at the end of 1988.
Unit Linked Insurance Plan (ULIP) launched by UTI in 1971.
Asset Management Company shortly AMC, the company that invests the pooled funds of investors in securities with investment objectives, handles the day to day operations and investment decisions by Fund Manager and professional research team. The function of managing assets on behalf of an Investor, usually for a fee/charge. Mutual Fund Company referred to as AMC.
SBI Mutual Fund, first Public Sector Undertaking (PSU) AMC by State Bank of India in June 1987. Canbank Mutual Fund, second PSU AMC by Canara Bank in December 1987. Now it is Canara Robeco Mutual Fund partnered with Robeco of the Netherlands, a global AMC.
Kothari Pioneer, first private AMC established in July 1993 and later merged with Franklin Templeton Mutual Fund. Taurus Mutual Fund on August 1993. ICICI Prudential Mutual Fund on October 1993.
UTI split into two management
- UTL Mutual Fund
“Unit Scheme 1964” & rules framed by Government of India.
UTI Mutual Fund
Sponsored by SBI, PNB, BOB and LIC and registered with SEBI.
The Securities and Exchange Board of India was established on April 12, 1992 in accordance with the provisions of the Securities and Exchange Board of India Act, 1992.
The regulation of buying, selling and dealing in securities such as shares of a company, units of mutual funds, derivatives, etc. and stock exchanges comes within the purview of SEBI.
Let see below Acts by SEBI regulaton
SEBI Act, 1992
- Protecting the interests of investors in securities.
- Promoting development of the securities market.
- Regulating the securities market.
Companies Act, 2013
- Provides regulations for issuance, allotment and transfer of securities, and related matters in public issues of securities.
Securities Contracts (Regulation) Act, 1956
Provides for recognition and regulation of transactions in securities in a Stock Exchange.
Depositories Act, 1996
Provides for electronic maintenance and transfer of ownership of dematerialized (demat) shares.
AMFI is the association of all the Asset Management Companies of SEBI registered mutual funds in India, was incorporated on August 22, 1995, as a non-profit organisation. To define and maintain high professional and ethical standards in all areas of operation of mutual fund industry. As of now, 45 AMCs registered with SEBI and member of AMFI.
- To protecting the interests of investors/unit holders.
- To undertake nation wide investor awareness programme so as to promote proper understanding of the concept and working of mutual funds.
- To define and maintain high professional and ethical standards in all areas of operation of mutual fund industry.
- To interact with the Securities and Exchange Board of India (SEBI) and to represent to SEBI on all matters concerning the mutual fund industry.
- To represent to the Government, Reserve Bank of India and other bodies on all matters relating to the Mutual Fund Industry.
- To disseminate information on Mutual Fund Industry and to undertake studies and research directly and/or in association with other bodies.
- To take regulate conduct of distributors including disciplinary actions (cancellation of ARN) for violations of Code of Conduct.
- To recommend and promote best business practices and code of conduct to be followed by members and others engaged in the activities of mutual fund and asset management including agencies connected or involved in the field of capital markets and financial services.
Is Mutual Fund investment risk? yes it is, but we need to learn some basic analysis to invest in mutual fund. SEBI and AMFI will help you to solve, if any problem with AMC or Advisory or Agency. I hope this article will help you to understand mutual fund history in India and its regulations.