Collective Investment Schemes

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Collective Investment Schemes

What is Collective Investment Schemes?

There are several avenues for investment for a better return and collective investment scheme is one of the modes of saving among them. It serves as a flexible savings vehicle for individuals; corporate bodies etc. to add funds for future needs. It can be defined as any scheme or arrangement made or offered by any company under which the contributions or payments are made by the investors for creating a pool of money, which is then utilized for the purpose of receiving profits, income, produce and property which are then looked after by the manager on behalf of the investors. Investors do not keep any day to day control, over the management and operation of such scheme or arrangement. But in India, the definition of CIS excludes mutual fund or unit trusts.

Scheme which doesn't constitute a Collective Investment Scheme are as prescribed below

History of Collective Investment Schemes in India

In the 1990s, several agro-based and plantation companies in India started pooling money from people with a promise of high returns of about 18-30%. Unfortunately, neither interest nor principal has been paid by them to the investors. Therefore, the Government of India, through a press release in 1997, announced its intention of putting in place an appropriate regulatory framework of regulating such entities which issue instruments such as plantation bonds or agro-based bonds to people. It decided to treat schemes through which such instruments are issued as “Collective Investment Schemes”, which are to be regulated by SEBI. In this direction, it finally came out with the notification of “SEBI (Collective Investment Schemes SEBI) Regulations, 1999” for the regulation of CIS.

Collective Investment Management Company

Collective Investment Management Company is a company established under the provision of Companies Act,2013 (or earlier Companies Act, 1956) with a main object organizing, operating and managing a Collective Investment Scheme and get registered with SEBI under the (Collective Investment Schemes SEBI) Regulations, 1999

Procedure to get registered with SEBI as explained below:

Enterslice a legal technology company providing end to end services to the applicant who is seeking to get itself registered with SEBI under the framework of required regulations. The applicant may raise their query on our mail-id or visit our website




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