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

Which of the following arrangements is expressly listed in Section 11AA(3) as NOT being a collective investment scheme?

Contributions in the nature of subscription to a mutual fund are expressly excluded by Section 11AA(3)(viii). The other arrangements pool money for returns under a manager without investor control and are not within any listed exemption.

  1. AAn arrangement where contributions are pooled and managed by a promoter for rental income from shops
  2. BA plantation arrangement managed on behalf of investors who have no day-to-day control
  3. CA scheme where contributions are in the nature of subscription to a mutual fundCorrect
  4. DA pooled emu-farming arrangement offered by a private firm

Explanation

Section 11AA(3)(viii) excludes schemes under which contributions are in the nature of subscription to a mutual fund, since mutual funds are regulated separately. The other options pool money for returns with management on behalf of investors and no listed exemption, so they can be collective investment schemes.

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