A mutual fund is a collection of stocks, bonds, or other securities owned by a group of investors and managed by a professional investment company. For an individual investor to have a diversified portfolio is difficult. But you can approach to mutual fund advisor and can invest into shares. Mutual funds have become very popular since they make individual investors invest in equity and debt securities easy.When investors invest a particular amount of mutual funds, he becomes the unit holder of corresponding units. In turn, mutual funds invest unit holders money in stocks, bonds or other securities that earn interest or dividend. This money is distributed to unit holders.
First, let us understand what exactly mutual funds are. These are pools of funds which are collected from investors and managed by an asset management company on their behalf for investing in different instruments such as stocks, bonds, Govt. securities and other asset classes with a hope of providing better returns to investors by diversifying their risk by investing in different asset classes.
Following are the people which can invest in mutual funds:-
1.People living in India that is Indian residents.
2.People not living in India that is Non-resident Indians (NRI)
3.All people who are of Indian Origin (POI)
4.ALL Indian public and private sector companies.
5.For minors, their parents or guardians can invest on their behalf.
6.Hindu Undivided Family(HUF)
7.Sole Proprietorship Firms that are firms with a single owner.
8.Cooperative societies
9.Partnerships firms
10.Charitable or Religious Trusts
11.Trustee and Asset Management Company
12.Registered Societies
13.Air force, navy and army Institutions
14.Scientific and/or industrial research organizations
Documents Required
First of all, every person needs to fill a Know your customer application form (KYC). Along with that following documents are required by different parties involved:-
1) For IndividualProof of Identity
The first and foremost thing for an individual investor is the proof of identity. Following things can be included in it:
•Photo PAN Card
•In case of Non-Photo PAN Card in addition to copy of PAN Card, any one of the following can be included
•Passport copy/Driving License/ Voter ID /Bank Photo Pass Book.
Proof of Address (any one of the following):
•Latest Telephone Bill, which could be Landline/Mobile and it, should not be more than 3 months prior to the date of application.
•Latest Electricity Bill (not more than 3 months prior to the date of application).
•Passport copy
•Bank Account Statement (not more than 3 months prior to the date of application).
•Latest Demat Account statement (not more than 3 months prior to the date of application).
•Voter ID.
•Driving License.
•Ration Card.
•Rent Agreement
2) For Hindu Undivided Family (HUF)
•Units can only be held in the name of Karta on behalf of the HUF
•For proof of identity Copy of pan Card is a must.
Proof of address (HUF)
•Latest Bank Passbook (not more than 3 months prior to the date of application).
•Bank account statement (not more than 3 months prior to the date of application)…
3) Non-individuals (PAN Mandatory) Companies / Bodies Corporate (Certified copy of the following):
•Certificate of incorporation.
•Memorandum & Articles of Association that is MOA and AOA.
•Approval of the Board of Directors (BOD) authorizing investment in mutual funds.
•Power of Attorney(POA) granted to its managers, officers or employees to transact business on its behalf
4) Partnership firms (Certified copy of the following):
•Certificates of Registration, in case of registered Partnership Firms.
•Any other officially valid documents in respect of holding a power of attorney to transact.
5) Trusts, foundations, NGO’s Charitable Bodies, Clubs/Mutual Fund Schemes (Certified copy of the following):
•Certificate of Registration, in case of registered Trusts.
•Any other valid documents in respect of holding a power of attorney to transact
•Offer Document of the Mutual Fund Scheme.
•Certificate of Registration, in case of registered Trusts.
•Any other valid documents in respect of holding a power of attorney to transact.
•Offer Document of the Mutual Fund Scheme.
