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

Which of the following arrangements is expressly excluded from being a collective investment scheme under Section 11AA(3) of the SEBI Act?

An arrangement where contributions are in the nature of subscription to a mutual fund is excluded under Section 11AA(3)(viii). Mutual funds have their own regulatory framework, whereas plantation, land-development and other unregistered pooled schemes are not on the exclusion list.

  1. AA pooled land-development arrangement managed by a promoter for investors
  2. BA scheme where contributions are in the nature of subscription to a mutual fundCorrect
  3. CA teak-plantation scheme promising a share of sale proceeds
  4. DA pooled fund of 50 crore rupees with no SEBI registration

Explanation

Section 11AA(3)(viii) excludes schemes under which contributions made are in the nature of subscription to a mutual fund. Mutual funds are regulated separately. The other options are typical pooled arrangements not on the excluded list, so they can be collective investment schemes.

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