What are investor’s right and obligations?
- Right to assess scheme related documents
Mutual Fund investors have the right to go through the details of the scheme, where they are planning to invest. The investor can ask the mutual fund company to provide the set of documents which contain all the details of the fund. These documents include SID, SAI, KIM and Funds Fact Sheet.
The responsibility of the investor:
While going through all these documents, it is the responsibility of the mutual fund investor to read all the scheme related information carefully. He must check if the objective of the investment and risk profile of the fund is aligned to his financial goals. He has to be aware of various expenses like fund management fee, taxes, and other operational costs
- Right to know the distributor fees and commission
Investment in mutual funds can be done directly or through an authorized distributor. If you are investing in a mutual fund through a distributor, you have all the right to know the fees or commission given by the mutual fund house to sell a particular scheme. This will help you know if the distributor is pushing you to buy this scheme, so that he gets a higher commission.
- Right to receive the dividends
Mutual fund investors have all the right to receive the dividends within 30 days from the date of dividend declaration. If the dividend is not paid on time, they are entitled to receive a 15% interest.
The responsibility of the investor:
Investors must provide contact details to receive updates from the fund house. They must provide their bank account details, where the dividends can be deposited.
- Complaint redressal system
Every fund house has a complaint redressal mechanism to address investor grievances. If you have any complaints, you can approach the designated officer in the fund house. If that is not redressed to your satisfaction, you can approach AMFI, or even Sebi, the regulator.
Responsibilities:
While going through all these documents, it is the responsibility of the mutual fund investor to read all the scheme related information carefully. He must check if the objective of the investment and risk profile of the fund is aligned to his financial goals. He has to be aware of various expenses like fund management fee, taxes, and other operational costs.
