September 30, 2010 3:25 pm
In case we choose SIP in Mutual Fund for long term say 20, 25 years, Is the money invested with private organisations(like HDFC, Reliance etc) is secure?
Mutual Funds come under the regulation of the SEBI and have to meet stringent regulations. Therefore, they cannot just close shop and run away with investors’ money.
In fact, India happens to have quite stringent rules and norms regarding the setting up of an AMC. Moreover, in the set-up of a mutual fund, there is a body of trustees who will look after the interest of investors.
The mutual fund itself is a trust registered under the Indian Trust Act, and is initiated by a sponsor. The sponsor is the person (who acts alone or with another corporate) will establish a mutual fund. The sponsor then appoints an AMC to manage the investment, marketing, accounting and other functions regarding the fund.
Therefore, while it may be possible for a mutual fund to inflict losses to the investors as a result of poor fund management, they just can’t wind up their operations and run away with your money.
Hope it clears…..
These All ASSET management co. are fully governed by SEBI . Sebi has formed very strict NORMS in favour of Investors and taking regular actions in favour of investors now a days . These Asset management co. have to provide redemption with in 10 working days otherwise Interest will be paid by them on the amount.
They regularly Send you Statements and Annual Reports by way u have Opted ( Either Physical or Email) for proper performance of funds.
Lastly but the most Important u must regularly review your account statements and if any discrepancies found please report to Co. immediately. Also in case of SIP please regularly check your Bank Statement in coordination with MF Account statement
Also to get good returns pl review the funds performance periodically.
Don’t worry about the security of your money. All the mutual fund companies are well regulated by AMFI & SEBI like SEBI controls stock market & IRDA regulates insurance sector.
Hope it will help you.
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