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SEBI Regulations require that at least two-thirds of the directors of trustee company or board of trustees must be independent, i.e., they should not be associated with the sponsors. Also, 50% of the directors of AMC must be independent. All mutual funds are
required to be registered with SEBI before they launch any scheme.

Net Asset Value (NAV) of a Scheme

The performance of a particular scheme of a mutual fund is denoted by Net Asset Value (NAV). Mutual funds invest the money collected from the investors in securities markets. In simple words, Net Asset Value is the market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day-to-day basis.

The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. For example, if the market value of securities of a mutual fund scheme is Rs. 300 Lakhs and the mutual fund has issued 10 Lakh units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs. 30. NAV is required to be disclosed by the mutual funds on a regular basis - daily or weekly - depending on the type of scheme.

Investment in a Scheme of a Mutual Fund

Mutual funds normally come out with an advertisement in newspapers publishing the date of launch of the new schemes. Investors can also contact the agents and distributors of mutual funds who are spread all over the country for necessary information and application forms. Forms can be deposited with mutual funds through the agents and distributors who provide such services. Now-a-days, the post-offices and banks also distribute the units of mutual funds.