Dos and Donts-Collective Investment Scheme (CIS)

Riyaz Khan (CA CS (Exec) MBA (Fin) Asst. General Manager-SEBI Internal Auditor-British Certifications Inc.)   (1315 Points)

18 December 2009  

DOS

􀀹 Before investing ensure that the entity is registered with SEBI.

􀀹 Read the offer document of the scheme especially the risk factors

carefully.

􀀹 Check the viability of the project.

􀀹 Check and verify the background/expertise of the promoters.

􀀹 Ensure clear and marketable title of the property/assets of the entity.

􀀹 Ensure that the Collective Investment Management Company has the

necessary infrastructure to carry out the scheme.

􀀹 Check the credit rating of the scheme and tenure of the rating.

􀀹 Check for the appraisal of the scheme and read the brief appraisal

report.

􀀹 Read carefully the objects of the scheme.

􀀹 Check for the promise vis-a-vis performance of the earlier schemes in

the offer document.

􀀹 Ensure that CIMC furnishes a copy of the Annual Report within two

months from the closure of the financial year.

􀀹 Note that SEBI cannot guarantee or undertake the repayment of money

to the investors.

􀀹 Please visit https://investor.sebi.gov.in for CIMC registered with SEBI

and FAQs with regard to Collective Investment Schemes in their

respective vernacular languages

 

DON’TS

 

􀀸 Do not invest in any CIS entity not having SEBI registration.

􀀸 Do not get carried away by indicative returns.

􀀸 Do not invest based on market rumours.