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CS Executive · Capital Market and Securities Laws · Collective Investment Schemes

Shree Samruddhi Credit Society, registered under a State co-operative societies law, offers a pooled scheme to its members that otherwise has all the features of Section 11AA(2). What is the position under Section 11AA(3) of the SEBI Act?

It is not a collective investment scheme. Section 11AA(3)(i) says any scheme offered by a co-operative society registered under the 1912 Act or a State co-operative law is not a CIS, despite meeting the sub-section (2) conditions.

  1. AIt is a collective investment scheme because the four conditions are satisfied
  2. BIt is a collective investment scheme if the corpus exceeds one hundred crore rupees
  3. CIt is not a collective investment scheme, because schemes made or offered by such a registered co-operative society are excludedCorrect
  4. DIt is not a collective investment scheme only if SEBI has granted a certificate

Explanation

Section 11AA(3)(i) excludes schemes offered by co-operative societies registered under the 1912 Act or any State co-operative law, notwithstanding sub-section (2). The exclusion does not depend on SEBI certification or corpus size.

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