Organization of a Mutual Fund

The Organization of a Mutual Fund is how the mutual funds are controlled. A number of entities are involved in the Organization of a Mutual Fund. This helps in the proper management of the mutual fund portfolio.

The Organization of a Mutual Fund contains entities such as

Mutual Fund Shareholders: The Mutual Fund Shareholders, like the other share holders have the right to vote. The voting rights include, the right to elect directors during the directorial elections, voting right to approve the alterations


investment advisory contract pertaining to the fund and provide approval for changing investment objectives or policies

• Board of directors: The Board of directors supervise the functional activities, which include approval of the contract Asset Management Company and other various service providers.
  
  
• Investment management company or Asset Management Company: This body handles the mutual fund portfolio as per the objectives and policies mentioned in the prospectus of the mutual funds
  
  
• Custodians: The custodians protect the portfolio securities. Mostly qualified bank custodians are used for mutual funds.
  
  
• Transfer Agents: The transfer agent for the purpose of maintaining records and similar functions. The maintenance of the shareholder's accounts, calculation of dividends to the be disbursed, sending information to the shareholders about the account statements, notices, and income tax information. Some of the transfer agent sends information to the share holders about the shareholder transactions and account balances. They also maintain customer service departments in order the cater to the queries of the shareholders
  
  
• SEBI: The primary aim of the Securities Exchange Board of India is to protect the interest of the mutual fund investors. The SEBI has formulated several policies for better functioning and controls the mutual funds. In the year 1993, SEBI issued guidelines pertaining to the mutual funds. All mutual funds, private sector and public sector are regulated by the guidelines of the SEBI. The Asset Management Company managing the funds has to be approved by the SEBI.