After you have complied with the KYC requirement, and are ready to start investing in mutual funds, as an investor you have several rights under Sebi's laws, rules and regulations.
At the same time, to have a smooth financial journey with the fund houses, you also have to fulfil certain duties.
Rights of an Investor:
A mutual fund offer document contains the scheme information document (SID) and a statement of additional information (SAI).
In addition, as an investor you also have the right to go through the key information document (KIM), that gives important information about the scheme you intend to invest as well as the fund house.
Email/SMS alerts:
With five working days after you have invested in a mutual fund scheme, you should receive an e-mail alert or an SMS about your investments.
The same applies for all the additional purchases that you make in the fund.
Fund statements, periodic updates and annual reports
After you have become a investor in the fund, you are entitled to receive periodic updates from the fund house about the scheme and the fund house you have your money invested.
You should also get the fund house's annual report and updates as and when fund houses issue those.
Consolidated statements
Mutual fund investors now also get a consolidated monthly statement of all the fundrelated transactions that the investor has carried out in each of the schemes where he/she has investments.
This statement includes all investments (equity, debt, liquid, gold ETF), across all the fund houses.
However, in case there is no transaction during a particular month, the investor will not receive any consolidated statement, but will get one statement every six months.
Here the sole identifier for an investor is his/her PAN.
Redemption and dividend payouts
You should get your redemption proceeds within 10 working days.
In case the fund house does not send the redemption proceeds within 10 working days of your instruction, you can claim interest at 15% per annum for the period of delay after the expiry of the 10th day.
In case of dividend, the corresponding number is 30 calendar days.
Change in scheme attributes
If your fund house changes some key attributes of the scheme in which you have put in your money, you automatically get the right to redeem your investments in that scheme without paying any exit load.
These fundamental attributes include a change in a fund's risk profile, type of instruments it can invest in.
How much the distributor makes?
While investing in a scheme, you have the right to ask your distributor how much he/she was making as commission by selling the particular scheme to you in which you are investing.
You can also ask for a comparative commission receipts for other schemes that the distributor sells to you.
In case you see that the distributors is getting the maximum or higher commission by selling this scheme to you, you can ask the reasons for advising such a scheme to you.
Duties of a fund investor
As an investor, your first duty is to be KYC complaint.
Some of the other important duties of an investor include keeping the fund houses where you have your investments updated with all your personal information, keeping proper nominations for all your investments, keeping tab of your investments on a regular basis (but not daily), having a direct credit facility with your bank in place, etc.
Credit and debit card facilities for hassel-free transactions
All the fund houses in India give electronic credit and debit facilities with most banks in the country. Such facilities ensure fast, secure, safe and hassle-free banking transaction between you and your fund house.
In addition to regular investments, it also helps faster receipt of dividend, redemptions, etc.
As an investor you should update the fund houses where you have your investments in case there is any change in your address for correspondence, bank account details etc.
However, with an uniform KYC proves in place, this aspect is mostly taken care of nowadays.
Source:-The Economic Times
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