STRUCTURE – RELIANCE

MUTUAL FUND

By
Gagan Pareek
Parvez
Rangwala Sainatth
Wagh

08/31/10 Welingkar Inst of Management and Development 1

 Mutual Fund ?
 “A mutual fund is a company that pools
money from many investors and invests the
money in stocks, bonds, short-term money-
market instruments, other securities or assets, or
some combination of these investments. The
combined holdings the mutual fund owns are
known as its portfolio. Each share represents an
investor's proportionate ownership of the fund's
holdings and the income those holdings generate
“
 Reliance Mutual Fund
India’s leading Mutual Fund
Average Assets under Management: 1,02,179 Cr
Investor Count : 73 Lakh Folios
Presence in 159 Cities across country
14 years of extensive market experience, 35
schemes combined with a strong performance
track record.
- AMFI Website,
2010


08/31/10 Welingkar Inst of Management and Development 3

Constitution and
Management
 47 Funds  RCAM
Reliance Growth Fund Reliance Vision Fund (September Reliance Fixed Horizon Fund VI Reliance Liquidity Fund (June
(September 1995) 1995) (December 2007) 2005)
Reliance Income Fund (December Reliance Liquid Fund (March Reliance Fixed Horizon Fund VII Reliance Interval Fund (March
1997) 1998) (January 2008) 2007)
Reliance Medium Term Fund Reliance Short Term Fund Reliance Fixed Horizon Fund IX Reliance Equity Advantage Fund
(August 2000) (December 2002) (March 2008) (June 2007)
Reliance Fixed Term Scheme Reliance Banking Fund (May Reliance Fixed Horizon Fund X Reliance Fixed Horizon Fund V
(March 2003) 2003) (August 2008) (September 2007)
Reliance Gilt Securities Fund Reliance Diversified Power Sector Reliance Fixed Horizon Fund XII Reliance Fixed Horizon Fund IV
(July 2003) Fund (March 2004) (November 2008) (August 2007)
Reliance Monthly Income Plan Reliance Floating Rate Fund Reliance InfrasReliance Equity Reliance Fixed Horizon Fund
(December 2003) (August 2004) Linked Saving Fund - Series I (April 2006)
(December 2007)
Reliance Pharma Fund ( May Reliance NRI Equity Fund Reliance Natural Resources Fund Reliance Fixed Horizon Fund II
2004) (October 2004) (January 2008) ( November 2006)
Reliance Media & Entertainment Reliance Index Fund (February Reliance Fixed Horizon Fund VIII Reliance Long Term Equity Fund
Fund (September 2004) 2005)* (March 2008) (November 2006)
Reliance NRI Income Fund Reliance Fixed Maturity Fund – Reliance Banking Exchange Reliance Equity Fund (February
(October 2004) Series I (March 2005) Traded Fund (May 2008) 2006)
Reliance Equity Opportunities Reliance Regular Savings Fund Reliance Fixed Horizon Fund XI Reliance Fixed Tenor Fund
Fund (February 2005) (May 2005) (October 2008)tructure Fund (November 2005)
(June 2009)
Reliance Fixed Maturity Fund – Reliance Tax Saver (ELSS) Fund Reliance Gold Exchange Traded Reliance Fixed Horizon Fund I
Series II (April 2005) (July 2005) Fund (October 2007) (August 2006)
Reliance Fixed Horizon Fund III Reliance Money Manager Fund
(March 2007) (March 2007)

08/31/10 Welingkar Inst of Management and Development 5

 Trustee AM C
Registered Office : Corporate Office : Registered Office : Corporate Office :
EO1, Reliance Greens, Express Building (4th & 6th EO1, Reliance Greens, Express Building (4th & 6th
Village Motikhavdi, Floor), Village Motikhavdi, Floor),
P.O. Digvijaygram, 14, 'E' Road, Churchgate, P.O. Digvijaygram, 14, 'E' Road, Churchgate,
District Jamnagar - Opp. Churchgate Station, District Jamnagar - Opp. Churchgate Station,
361140 Mumbai 400 020. 361140 Mumbai 400 020.
(GUJARAT) Tel. 022 – 3041 4800, (GUJARAT) Tel. 022 – 3041 4800,

• Reliance Capital Trustee Co. Limited (RCTC), a

company incorporated under the Companies
Act, 1956, has been appointed as the Trustee
to the Fund vide the Trust Deed dated April 25,
1995 executed between the Sponsor and the
Trustee.
– RCTC has been appointed as the Trustee to
“Reliance India Power Fund”, a Venture Capital
Fund registered with the SEBI vide registration
number IN/VCF/05-06/062 dated June 16, 2005
08/31/10
– An application has also been filed for registration of
Welingkar Inst of Management and Development 6
“Reliance Venture Capital Fund” with SEBI.
 Bankers to RCAM
ABN Amro Bank
Axis Bank
Citibank N. A.
Deutsche Bank AG
Development Bank of Singapore
HDFC Bank Limited
HSBC Bank
ICICI Bank Limited
IDBI Bank
Ing Vysya Bank
Kotak Mahindra Bank
State Bank of India
Standard Chartered Bank
Yes Bank



08/31/10 Welingkar Inst of Management and Development 7

 Structure of AMC

Board of Directors
08/31/10 Welingkar Inst of Management and Development 8
 Role of AMC
• Transparency
• Liquidity
• Flexibility
• Repatriation
• Decision Making
• Valuation
• Drafting of Structure of Scheme
•
•
 Duties and Obligations of
the AMC
• CEO of AMC ensures fund • Decision are taken by team
complies with SEBI norms and comprising of
investments made are in – Fund Managers
norms of Fund objectives as in – Chief Executive Officer
OD
– Investment Committee
• Investment decisions made in

interest of unit holders.
• Fund Managers ensure that • Based on
investments are made in the – Research Report
interest of Unit holders and as – Market Intelligence
per the norms and objectives – Analysis of Macro and
of FOD Micro economic
• AMC shall not utilize the services indicators
of Sponsor for purchase of new – Market Trends
securities 

• AMC reports data to both SEBI 

and Trustees.
• The RCAM shall not invest in any
of its schemes unless full
08/31/10disclosure of its intention toof Management and Development
Welingkar Inst 10
invest has been made in the
 IMA and Duties of RCAM
a) RCAM will be responsible for making,
floating, issuing Schemes for the Trust
after approval of the same by the
Trustees and SEBI as well as investing
and managing the funds mobilized
under various Schemes, in accordance
with the provisions of the Trust Deed
and SEBI Regulations.
b) RCAM must disclose the basis of
calculating the repurchase/redemption
price and Net Asset Value of the
various Schemes of the Fund to the
investors, at such intervals as may be
specified by SEBI and/or the Trustees
and in accordance with the SEBI
Regulations.
c) RCAM must maintain books and records
about the operation of various
Schemes of the Fund to ensure
compliance with the Regulations and
guidelines for Mutual Funds as may be
issued by SEBI from time to time, and
shall submit a Scheme wise quarterly
08/31/10 Welingkar Inst of Management and Development
report on functioning of the Fund to
d) RCAM shall exercise all due diligence
and vigilance in carrying out its duties
and in protecting the rights and
interest of the
 unit holders.
e) RCAM will at all times ensure that the
Trust Fund is segregated from assets
of RCAM and assets of any other funds
for which RCAM is responsible.
f) RCAM shall submit to the Trustee all
information concerning the operation
of the various Schemes of the Fund
managed by RCAM at such intervals
and in such manner as required by the
Trustee to ensure that RCAM is
complying with the provisions of the
Trust Deed and SEBI Regulations.
•
11
 M a in O b je ctive o f Tru st
• To carry on the activity of a Mutual Fund as may be
permitted by law and formulate and devise various
collective Schemes of savings and investments for
people in India and abroad and also ensure liquidity of
investments for the Unit holders
• To deploy Funds thus raised so as to help the Unit holders
earn reasonable returns on their Savings
• To take such steps as may be necessary from time to time
to realize the effects without any limitation.
 Duties and Obligations of the
Trustees
 Trustee main duties before Fund Launch:
1 Systems in place for its back office, dealing room and accounting
2 Appointed all key personnel including fund manager(s) for the Scheme(s)
and submitted their bio-data which shall contain the educational
qualifications, past experience in the securities market to SEBI, within
15 days of their appointment;
(iii) Appointed Auditors to audit its accounts;

(iv) Appointed a Compliance Officer to comply with regulatory requirement

and to redress investor grievances;

(v) Appointed Registrars and laid down parameters for their supervision;

(vi) Prepared a compliance manual and designed internal control

mechanisms including internal audit systems; and

(vii) Specified norms for empanelment of brokers and marketing agents.

The Trustees shall obtain the consent of the unit holders of the Scheme:

(i) Whenever required to do so by SEBI in the interest of the unit holders;

(ii) Whenever required to do so, on the requisition made by three-fourths of

the unit holders of any Scheme under the Mutual Fund;

(iii) When the majority of the Trustees decide to wind up the Scheme or

08/31/10prematurely redeem the Units;

Welingkar Inst of Management and Development 13
 Duties and Obligations of the
Trustees
1. Trust Deed
2. Right to Obtain Information from AMC
3. Monitors broker and AMC transactions
4. Ensures AMC works as per SEBI regulations, 1996
5. Informs SEBI for 1 Lac Plus transactions
6. Informs Unit holders and SEBI for change in structure and load if situation
demands change
1. Unit holders are given a option to Exit
2. Change is advertised in Leading Newspaper
7. Periodically review service contracts like Custodian documents
8. Periodically Review Customer Complaints and Review.
9. Appoint Statutory Auditors and have one Independent Director
10.Due Diligence
11.Signs the IMA with the AMC
12.Keeps a check on Vacant Positions and nominates individual.
13.Prescribe and adhere to a code of ethics by the Trustees, Asset
Management Company and its personnel.
08/31/10 Welingkar Inst of Management and Development 14
 T h e C u sto d ia n
• Trustee has appointed Deutsche Bank as Custodian


• Duties of Custodian:
– Provide post-trading and custodial services to the Mutual
Fund;
– Keep securities and other instruments belonging to the
Scheme in safe custody;
– Ensure smooth inflow/outflow of securities and such other
instruments as and when necessary, in the best
interests of the unit holders
– Be responsible for loss of or damage to the securities due
to negligence on its part or on the part of its approved
agents.

–
• The Custodian will charge the Mutual Fund, portfolio fee,
transaction fee and out-of -pocket expenses in
accordance with the terms of the Custody Agreement
and as per any modification made thereof from time to
 THE REGISTRAR
R C A M h a s a p p o in te d M / s. K a rvy C o m p u te rsh a re Pvt. Lim ite d

A s R e g istra r to th e S ch e m e K C P L w ill
Øa cce p t a n d p ro ce ss in ve sto r's
a p p lica tio n s
Øh a n d le co m m u n ica tio n s w ith in ve sto rs
Øp e rfo rm d a ta e n try se rvice s
ØD isp a tch A cco u n t S ta te m e n ts
Øo th e r fu n ctio n s a s a g re e d , o n a n o n g o in g
b a sis.
Ø
T h e R e g istra r is re sp o n sib le fo r ca rryin g o u t d ilig e n tly th e
fu n ctio n s o f a R e g istra r
a n d Tra n sfe r A g e n t a n d w ill b e p a id fe e s a s se t o u t in th e
a g re e m e n t e n te re d in to
w ith it a n d a s p e r a n y m o d ifica tio n m a d e th e re o f fro m tim e to
tim e .

08/31/10 Welingkar Inst of Management and Development 16
 Fees
AMC Fees : In te rm s o f th e In ve stm e n t M a n a g e m e n t A g re e m e n t
and the Regulations, the AMC is entitled to a management and
advisory fee at the rate of 1.25% of the average daily net assets
for net assets up to Rs.100 crore and at the rate of 1.00% for the
net assets in excess of Rs.100 crore. For Schemes launched on a No-
Load basis, the AMC is entitled to collect and additional
management fee of up to 1% of the average net assets outstanding
in each financial year and the total management fee shall not
exceed the limit stated under the Regulation 52(6) of SEBI.
Trust Fees : Pursuant to the Trust Deed constituting the Fund, the
Fund is authorized to pay the Trustee, a fee for their services, in
addition to the reimbursement of all costs, charges and expenses,
sum computed at the rate of 0.05% of the amount, being the
aggregate of the Trust Fund and Unit Capital of all the Schemes
put together on 1st April each year or a sum of Rs.5
Lacs, which ever is lower or such other sum as may be agreed upon
between the Settler and the Trustee from time to time. The Trustee
may charge further fees as permitted from time to time under the
Trust Deed and the Regulations.

0 8 /3 1 /1 0 Welingkar Inst of Management and Development 17

 Sponsor Loss Protection
• RCL contributes Rupees One Lac as the
initial contribution to the corpus for the
setting up of the Mutual Fund.
• RCL is responsible for discharging its
functions and responsibilities towards the
Fund in accordance with the SEBI
Regulations.
• The Sponsor is not responsible or liable for
any loss resulting from the operation of
the Scheme beyond the contribution of an
amount of Rupees one lakh made by them
towards the initial corpus for setting up
the Fund and such other accretion and
additions to the corpus
 Duties and Obligations of
Investor
•
• Study of Offer Document
• In case of dividend declaration, investors have a right to receive
the dividend within 30 days of declaration
• On redemption request by investors, the AMC must dispatch the
redemption proceeds within 10 working days of the request.
• Investors can obtain relevant information from the trustees and
inspect documents like trust deed, investment management
agreement, annual reports, offer documents, etc. They must
receive audited annual reports within 6 months from the
financial year end.
• Investors have a right to be informed about changes in the
fundamental attributes of a scheme. Fundamental attributes
include type of scheme, investment objectives and policies and
terms of issue.
• Investors can approach the investor relations officer for grievance
redressal

•
 Mutual Fund Cycle

08/31/10 Welingkar Inst of Management and Development 20

MUTUAL FUND OPEARATION
IN V E S T O R ’ S PR O D U C T
S E R V IC E D E S IG N

THE
CHAIN
OF
OPERATION PR O D U C T
M A R K E T IN G

OUT FU N D
S O U R C IN G M A N AG EM EN T
MUTUAL FUND OPERATION
PR O D U C T P R O D U C T M A R K E T IN G FU N D M A N A G E M E N T
D E S G IN ü ü
ü üC O S T üC A PITA L
üIN N O V A T IO N ü P R O T E C T IO N
ü üA G G R E S S IV E ü
üS U PE R IO R M A R K E T IN G üM A R K E T T IM IN G
D E S IG N ü ü
ü üU P FR O N T C O S T üA S S E T Q U A LIT Y
üA D A PA TA B ILIT Y
O U T S O U R C IN G IN V E S T O R S E R V IC E
ü ü
üC O S T üC U S T O M E R
C O N TR O L FO C U S
ü ü
üFLE X IB ILIT Y üB E TT E R
ü C O N FID E N C E
üC H O IC E ü
üE FFIC IE N T
S E R V IC E
 TYPES OF MUTUAL FUNDS

08/31/10 Welingkar Inst of Management and Development 23

 Thank
You
08/31/10 Welingkar Inst of Management and Development 24