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CS Executive · Capital Market and Securities Laws · Mutual Funds

Under Section 11AA(2) of the SEBI Act, 1992, which condition is among those that make an arrangement a collective investment scheme?

One condition under Section 11AA(2) is that the contributions or payments made by investors are pooled and utilised for the purposes of the scheme. Investors must not have day-to-day control, and no minimum corpus of Rs 500 crore is required.

  1. AInvestors have day-to-day control over the management of the scheme
  2. BInvestors' contributions are pooled and utilised for the purposes of the schemeCorrect
  3. COnly cooperative societies may offer the scheme
  4. DThe scheme must have a corpus of at least Rs 500 crore

Explanation

Section 11AA(2)(i) requires that contributions or payments by investors are pooled and utilised for the scheme. Day-to-day control by investors is the opposite of condition (iv), which requires investors NOT to have such control. Cooperative society schemes are excluded under sub-section (3), and the Rs 100 crore figure appears only in the deeming proviso.

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