Securities and Exchange Board of India (SEBI) - SEBI is the primary regulator of mutual fund industry in India. All the mutual funds must register themselves with the SEBI. Mutual Funds are governed under a set of regulations called Securities and Exchange Board Of India (Mutual Funds) Regulations, 1996 which have been designed to protect the investors. Mutual funds can be penalised for violating norms.
In addition to SEBI, mutual funds need to abide by the regulations of following other regulators in a limited manner:
- Reserve Bank of India (RBI) - RBI acts as regulator of sponsors of bank-sponsored mutual funds. Mutual funds who deal in the money market need to get registered with the RBI. Mutual fund is not allowed to bring out a guaranteed/ fixed returns scheme without taking prior approval from RBI.
- Companies Act - Asset Management Company and Trustee Company are subject to the provisions of the Companies Act, 1956.
- Indian Trusts Act - As the mutual funds are formed as a public trusts under the Indian trusts Act, 1882, they have to abide by the provisions of the Indian Trusts Act, 1882.
- Ministry of Finance (MoF) - The MoF is the appellate authority under SEBI regulations. The finance ministry is the supervisor of the SEBI and the RBI. Appeals on the SEBI rulings relating to mutual funds can be made by the aggrieved parties to the MoF.
- Stock Exchange - It is required from the closed-end funds to list their units on a stock exchange. This listing is subject to provisions of the listing regulation of stock exchanges.