A Registered CIMC is entitled to raise funds from the public for a particular scheme, and in return to this shares or units are given to the people and these units are given in proportion to the contribution made by the investor. Further, by law these units have to be compulsorily listed on stock exchange.
What is meant by Collective Investment scheme?
A Collective Investment Scheme as the name suggests means that it is an investment scheme wherein several individuals comes together to pool their money for investing in a particular assets and for sharing the returns arising from that investment as per the agreement enforced between them prior to pooling in the money.
A Registered CIMC is entitled to raise funds from the public for a particular scheme, and in return to this shares or units are given to the people and these units are given in proportion to the contribution made by the investor. Further, by law these units have to be compulsorily listed on stock exchange.
As a guarantee, SEBI cannot guarantee we undertake the repayment of money to the investors invested in CIMC.
Whom to approach for any Grievance Redressal
For any grievance approach, Applicant must approach CIMC first and then to SEBI, if he is not satisfied. An investor can also approach District consumer redressal forum in case of any deficiency on part of company.
In certain cases where company fails to repay the deposits collected by it , then it should be settled as per section 58A of Companies Act, 1956. Then, SEBI in no way can help the investor in any manner as it is out f the purview of SEBI.
After obtaining the registration, as CIMC, SEBI shall issue a press release furnishing the details of CIMC like the name, address, and contact number of that registered entity and same shall appear on SEBI’s website i.e. www.sebi.gov.in.
What are the Penal provisions if a registered CIMC violates certain provisions of the Regulations?
If a registered CIMC violates any provisions of the regulations, then in such case action like, suspension or cancellation of the certificate of registration may be initiated against the registration of the company. Further, SEBI in the general interests of the security market and the investors at large, initiate criminal proceeding under section 24 of the SEBI Act, in addition to the passing of some stringent directions like-
- Prohibit the company to Collect any money/fund from an investor or to launch any new scheme further.
- Prohibiting the company from disposing of any of the properties/assets of the scheme acquired in violation of the regulations.
- Requiring the company concerned to dispose off the assets acquired under the scheme in a manner as advised in the directions.
- Requiring the company concerned to refund any money or the assets to the concerned investors along with the requisite interest on it or otherwise, collected under the scheme.
- Disallowing the company concerned from operating in the capital market or from entering the capital market for the specific period.
As we can see above, that the penalty imposed are very high and it is very difficult to violate the rule, norms or regulations. This will insure the safety and risk free environment for the investors.