Mutual Fund Investor: Rights You Should Be Aware of!

Every investor enjoys some rights and duties under SEBI’s laws. Each fund house is obligated to extend those rights to its investors. A lot of investors are not aware about the rights that they can exercise as per SEBI’s rules and regulations. Listed below are some rights that a mutual fund investor can enjoy.

Scheme related documents

An investor has the right to go through all the scheme related documents before investing in a particular mutual fund. He can ask for a set of documents from the mutual fund company which includes all the information about the mutual fund scheme. Also, if there are any changes in the scheme in which an investor has already invested in, the fund house should inform the investor about such changes.

Fees/commissions of Distributors

An investor can invest in a mutual fund scheme directly or he can opt to invest through an authorised distributor. If an individual is investing in mutual funds through a distributor, he has the right to know about the fees or commission that the fund house is paying to him in order to sell a particular scheme. This will give you a fair idea about the scheme that a distributor is pushing to sell you. It can be possible that he is selling a particular scheme to you as he is getting a higher commission for selling that scheme.

Dividends & Redemptions

Usually, when an investor invests in mutual funds, he does not get into the details of knowing the proceeds of dividends and redemptions. Sometimes, when a fund announces a dividend, the investors are unaware of the process of the proceeds being credited to his account. An investor has the right to know every detail about the proceeds of dividends and redemptions.

Complaint redressal system

Each mutual fund house has an investor grievance cell. If an investor wants to register any complaint, he can approach the grievance cell. If the matter is still not addressed, he can approach AMFI (Association of Mutual Funds in India) or SEBI (Securities Exchange Board of India).