There are certain rights enjoyed by the investors with respect to service standards that they can expect from mutual funds:
- Investors are entitled to receive dividends declared in a scheme, within 30 days.
- Redemption proceeds have to be sent to the investor within 10 business days from the date receipt of such request by the AMC. Delays in this respect will lead to the AMC paying a penal interest on the proceeds at a rate specified by SEBI from time to time. (The current rate is 15% and is to be borne by the AMC or sponsor and not the fund).
- If an investor fails to claim the dividend or redemption proceeds he has the right to claim it up to a period of 3 years from the due date at the then prevailing NAV. After the expiry of this period, investors will be eligible to receive the NAV prevailing at the end of the 3rd year.
- Mutual funds have to allot units within 30 days of the IPO and also the scheme for redemption if it is open-ended scheme.
- Mutual funds have to publish their half-yearly results in at least one national daily, and publish their entire portfolios at least once in six months. Such disclosure should be done within 30 days from the six monthly account closing dates of the fund.
- Trustees will have to ensure that any information having a material impact on the unit holders’ investments should be made public by the mutual fund.
- If 75% of the unit holders’ so decide:
- A scheme can be wound up.