Which Groups are Involved in Mutual Funds?

From the establishment of mutual funds to their operation, many groups are involved in Mutual Funds. Thus mutual funds are the result of collective effort. Since mutual funds have many groups from their establishment to their operation. Therefore, no one group can do its own thing even if it wants to.

The following is a brief description of the Groups are Involved in Mutual Funds

Promoters

It can be one or more people. These are the people who think of setting up a mutual fund and establish it by giving it a tangible form. Promoters are usually registered companies, financial institutions or banks, etc. who have strong financial instruments and a reputation in the market.

According to SEBI rules, the promoters should have at least 40% share in the capital of the asset management company. The work of registering the mutual fund with SEBI is done by the promoters only.

Trustee

A trustee is an important person in a group of mutual funds. The trustee is responsible for maintaining the assets of the mutual fund to protect the interests of the investors and keeps a close watch on the asset management company.

The trustee also ensures that the asset management company adheres to the rules of the trust and the guidelines of SEBI. Trustees charge mutual funds for their services.

Asset Management Company

An asset management company is a corporate body that invests the money collected from investors in better securities through its fund managers. These companies are registered with SEBI. These companies charge management fees from mutual funds for investment management. Professional managers are hired by these companies for investment management and better results.

Custodian

The custodian is the person who secures the securities obtained from the investment. It is also called depository. At present since the physical form of securities does not exist. So the custodian in
Securities are secured in electronic form.

Investor

Individuals who invest money in mutual funds are called investors. These individuals are shareholders in mutual funds in proportion to the units they hold.

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