The accompanying is the eligibility criteria for grant of a certificate of registration as per Regulation 7 of SEBI (Mutual Funds) Regulations, 1996. For the aim of the grant of a certificate of registration, the applicant has got to fulfill the subsequent, namely:-

• The sponsor must have a soundtrack record and general reputation of honesty and sincerity in all his business transactions. For the needs of this clause “sound track record” shall mean the sponsor should-
  1. Pursue a financial services company for a term of not less than five years.
  2. The net worth is positive for all the five years immediately preceding it.
  3. The net value in the immediately preceding year is greater than the sponsor’s capital contribution to the asset management company.
  4. Since paying for depreciation, interest, and tax, the sponsor had income in three of the five years immediately preceding it, including the fifth year.
• The candidate is a fit and proper individual.
• Within the case of an existing mutual fund, such fund is within the sort of a trust and therefore the deed of trust has been approved by the Board.
• The sponsor has contributed to or contributes to, at about 40 percent of the asset management company’s (AMCs) net worth.
• Given that any individual holding 40 percent or more of the asset management company’s net worth is considered to be a sponsor and is required to comply with the eligibility requirements laid down in those regulations.
• The sponsor or any of its directors or the principal officer to whom the mutual fund is to be employed is not guilty of fraud or is not accused of an offense involving moral turpitude or is not guilty of any economic offense.
• Appointment of trustees, in compliance with the rules of the regulations, to serve as trustees for the mutual fund
• Assignment of an asset management firm to administer the mutual fund and, in compliance with the terms of those regulations, to run the scheme of such funds.

1. At any stage of registration, the requester must provide all the required information within 30 days from the date of receipt of any communication from SEBI for the stated purpose, otherwise, the case may be deemed to have been closed by SEBI.
2. SEBI will evaluate the application and send a link to you regarding your eligibility status. If you qualify, you will need to take the following steps within 12 months from the date of contact, otherwise, you will need to submit a new application:

• Incorporation of the AMCs Companies and the Trustee Company/Board of trustees: For this purpose, you may submit two copies of the completed Memorandum and Articles of Association of the Asset Management Company and the Trustee Company for distribution to the Registrar of Companies.
  
  Please ensure that these documents contain the clause that “unless otherwise stated in these documents, only those activities are permitted under the SEBI Regulations (Mutual Funds). All provisions of the SEBI Regulations (Mutual Funds), 1996, and periodic guidelines will apply. ”
  
  Please also indicate the ROC address where these companies will be located.
• Certificate of Auditor: After the addition of AMC companies and Trustee Company, please submit a certificate from the Chartered Accountant validating that:
  
  1. The donor has contributed at least 40% to the fair value of the AMC (Regulation 7 (c).
  2. AMC has a cost less than Rupees Ten Crore (`100 million), as expected under regulation 21 (1) (f) of the SEBI Regulations (Mutual Funds), 1996 (full price must be provided in the following format):

  Particulars	Amount (`)
  Paid-up capital
  Add: Free reserves of the company
  Less: miscellaneous expenditure to the extent not written-off
  Less: accumulated losses, if any
  Less: intangible assets, if any
  Total Net worth

• Filing of completed copies of the Agreement for Trust Deed and Investment Management: Please include copies of the trust agreement and the Investment Management Agreement and a checklist that clearly outlines the contents of the terms of the trust agreement and the Investment Management agreement in terms of schedule three and the fourth SEBI Regulations (Mutual Funds).
• Infrastructure Setting by Applicant :
  • After complying with the above requirements, a detailed note of the resources available to the Asset Management Company should be submitted to SEBI, providing the following information:
  • Office yard details and address.
  • AMC organizational chart, which clearly describes the responsibilities of the various employees.
  • The profile of key staff members including fund managers and equity research staff.
  • Adequate adjustment of staff in fund management, equity surveys, and other workplaces taking into account the expected size of the fund. At what stage, the number of key employees to be reviewed must be indicated.
  • System support based on hardware and software.
  • Arrangements designed for investor services.
  • Establish a financial capacity to fund the Mutual Fund which provides details of the expected size of the public fund over a period of time.
  • Internal systems and control systems are designed to evaluate internal trading and past performance.
  • Financial size AMC feels it has the administrative capacity and technology available to the sponsor / AMC etc.
  • Whether a compliance manual has been prepared to ensure that all the provisions of the SEBI (Mutual Funds) Regulations and Guidelines are complied with. (All guidelines for joint funding are available on the SEBI website).
  • Submission of a completed Form C and Form D. That provides details of the Trustee Company and AMC companies, as under in the First Schedule to the SEBI Regulations (Mutual Funds).
  • Details about the directors of the Trustee Company and the AMC in the prescribed manner (Please refer to the SEBI Circle dated December 20, 2001, available on the website).
  • Bio data for key employees in hard and soft copies (Please refer to the SEBI Circle dated May 7, 1997)
  • Any other information required to apply for registration.
• Issuance of Certificate of Registration: Once all the above requirements have been complied with and the required fees such as the Second Schedule of Regulations have been paid, SEBI will issue a certificate of registration as a partnership fund and will accept AMC. SEBI can also conduct an applicant’s infrastructure test before issuing a registration certificate.
  
  In addition, it may be noted that in the event that no Mutual Fund scheme is introduced within 12 months from the date of registration, the registration offered will be deemed to have been canceled.