Mumbai, Mar 20: The Sebi panel on collective investment schemes is considering a net worth requirement of 10 per cent of the amount collected by the company or Rs 10 crore, whichever is higher, to be brought in by the promoter of such a scheme. It has also suggested that only limited companies be allowed to float such schemes.The committee, which met on Friday, has finalised the definition of collective schemes and circulated it among the members of the panel for their suggestions. The definition will have some exemptions to exclude schemes like a mutual fund, a provident fund scheme and an insurance scheme. The panel members are also considering a minimum capital requirement for companies coming out with collective investment schemes.
Maintaining a minimum capital would also give credibility to the company and a safety base to the investor. Currently, even in the mutual fund industry the asset management company which manages the funds collected from the schemes has to maintain a minimum net worth of Rs10 crore. Companies coming out with plantation schemes do not have to maintain a minimum capital requirement. The panel is also looking into the general structure of the company. Some of the recommendations include that that only a limited company and no proprietorship or a partnership company be permitted to float such collective investment schemes.
The panel has also asked Sebi to prepare the draft regulations to bring it under the regulatory purview. The panel will meet again on April 23 to consider the draft regulations for these collective investment schemes. The panel set up by Sebi has been set up to look into the working of collective investment schemes and recommend regulations for these companies keeping the basic rationale of investor protection.
The panel is looking at the UK model for the definition of collective investment schemes. Sebi has already passed a directive on all plantation companies against collecting funds without taking a rating from the four active rating agencies. This was inline with the earlier recommendations of the panel.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
