5/6/24, 8:41 PM Collective Investment Scheme (CIS) - Definition, Features

Collective Investment Scheme

Sign In

A Collective Investment Scheme (CIS) is an investment scheme offered by any company under which the payments made by the investors are pooled and u
with an objective Read more

We are rated~ Top performing plans with High Returns*

Invest ₹10K/month & Get ₹1 Crore returns*
Best
Investment 6.7 Crore 51 3.4 Crore
Plans Your Name
Registered Consumers Insurance Partners Policies Sold

Generate
wealth with India +91 Mobile Number
high returns
Earn 1 Cr in We don’t spam
maturity with
Zero LTCG tax^
View Plans

Double tax Your personal information is secure with us

savings^
By clicking on "View Plans" you agree to our Privacy Policy and
On premiums
Terms of use
(under 80C)
and on Get Updates on WhatsApp
maturity
(under
24.15%
Returns*
21.92%
10(10D)) We are rated~
Returns*

Compare &
choose the 6.7 Crore 51 3.4 Crore
20.1% best
Registered Consumers Insurance Partners Policies Sold
Returns* 30+ Plans and
150+ Fund
options

Home Investment Plans Articles - IP Collective Investment Scheme

Instant Tax Receipt

Top Investment Plans 2024

You Invest: ₹10,000 /month Invest For: 10 Years Age: 30 Year

Past 10 Yrs Returns Lump sum Payout #

24.15% ₹3.35 Cr Know More
Signature MidSmall Cap 400 Index Fund If you had invested 20 Yrs ago

Avail units at ₹10 NAV - New Fund Offer

Past 10 Yrs Returns Lump sum Payout #

21.92% ₹2.31 Cr Know More
Fortune Pro Whole Life Mid Cap Equity Fund If you had invested 20 Yrs ago

Invest More Get More!

View More Plans YOU GET
NEED HELP WITH INVESTMENTS
YOU INVEST

₹1 Crores* ₹10K/month

YOU GET YOU INVEST

https://www.policybazaar.com/investment-plans/articles/collective-investment-scheme/ 1/7
5/6/24, 8:41 PM Collective Investment Scheme (CIS) - Definition, Features
₹8K/month
What is a Collective Investment Scheme (CIS)? ₹80 Lakhs* Sign In

The Collective Investment Scheme definition is an investment method where groups of individuals pool
YOU GET YOU INVEST
their money together and invest it in different best investment options, like:
₹50 Lakhs* ₹5K/month

Stocks
VIEW PLANS

Bonds

Real estate
Calculators
Other assets
SIP Calculator
With CIS, you can access a wider range of investment options and reduce the risk of losing all your
Income Tax Calculator
money on just one investment.

NPS Calculator
The primary purpose of a CIS is to provide individuals with access to a diversified portfolio of
investments that may be challenging or costly to achieve individually. ULIP Calculator

This scheme is managed by professional fund managers who make investment decisions on behalf of Show More Calculator

the investors. Each investor owns units or shares in the scheme, proportionate to their investment
amount.

Note:

SEBI regulates Collective Investment Schemes in India

The SEBI (Collective Investment Schemes) Regulations, 1999, and subsequent amendments
define the participants' roles and responsibilities.

Examples of Collective Investment Scheme:

Some examples of a Collective Investment Scheme SEBI are as follows:

Mutual Funds

Exchange-Traded Funds (ETFs)

Hedge Funds

Real Estate Investment Trusts (REITs)

Private Equity Funds

What are the Features of Collective Investment Scheme (CIS)?

The key features of a Collective Investment Scheme SEBI are listed below:

Pooling of Funds: CIS allows pooling together funds from multiple investors who hold
relatively smaller amounts of money. It helps them to invest collectively in a diversified
portfolio of assets, which may not be accessible to them individually

Professional Management: Professional fund managers manage CIS. These professionals

analyse market trends, conduct research, and select suitable investments aligned with the
scheme's objectives

https://www.policybazaar.com/investment-plans/articles/collective-investment-scheme/ 2/7
5/6/24, 8:41 PM Collective Investment Scheme (CIS) - Definition, Features

Diversification: This scheme provides investors with access to a diversified portfolio of

Sign In
investment asset classes, sectors, or geographic regions. Portfolio diversification helps mitigate
the impact of poor performance in any one investment on the overall portfolio

Ownership through Units or Shares: Investors in a Collective Investment Scheme own units or
shares that represent their proportionate ownership in the scheme. The value of these units or
shares is directly linked to the performance of the underlying assets. Investors can buy or sell
units/shares, allowing for liquidity and flexibility in managing their investments

Transparent Reporting: CIS typically provides regular reports to investors, disclosing the
scheme's financial information, performance, and holdings. This transparency helps investors
monitor their investments and make informed decisions

Regulatory Oversight: CIS is subject to regulatory oversight in most jurisdictions. Regulatory

authorities impose rules and regulations to protect investors' interests, ensure transparency,
and promote fair practices in the operation and management of collective investment schemes

Investment Objectives and Strategies: Each CIS has its investment objectives and strategies.
Some schemes focus on capital appreciation, aiming for long-term growth. Other plans
emphasise on generating income through dividends or interest payments. The scheme's
investment strategy outlines the types of assets it invests in and the risk profile it maintains

Accessibility and Affordability: CIS offers access to investment opportunities that may
otherwise be challenging for individual investors to access or afford. By pooling funds,
investors can benefit from economies of scale, professional management, and reduced
transaction costs.

What are the Exemptions under Collective Investment Scheme?

A Collective Investment Scheme SEBI does not include the following categories of schemes:

Any scheme/ arrangement made available by a co-operative society or by a society that is

registered or presumed to be registered under any current State law relating to co-operative
societies;

A scheme/ agreement under which non-banking financial companies take deposits;

Any scheme/ arrangement that is an insurance contract to which the Insurance Act applies;

Any Plan, Pension Plan, or Insurance Plan that is outlined in the Employees Provident Fund and
Miscellaneous Provisions Act of 1952;

Any scheme or arrangement that accepts public deposits under Section 58A of the Companies
Act of 1956 (1 of 1956);

Any scheme or arrangement whereby a business certified to be a mutual benefit society or

Nidhi under section 620A of the Companies Act, 1956 (1 of 1956) accepts deposits;

Any scheme or arrangement that satisfies the criteria for chit business under Section 2(d) of
the Chit Fund Act of 1982 (40 of 1982);

A scheme or arrangement in which payments are made in the form of subscriptions to mutual
funds;

https://www.policybazaar.com/investment-plans/articles/collective-investment-scheme/ 3/7
5/6/24, 8:41 PM Collective Investment Scheme (CIS) - Definition, Features

Who are the Participants in a Collective Investment Scheme? Sign In

In India, the participants in a Collective Investment Scheme (CIS) can include various entities and
individuals. Here are the common participants involved in a CIS:

Participants Details

Sponsor The sponsor is the person/ entity responsible for proposing, initiating and
setting up the Collective Investment Scheme
They fulfil the necessary regulatory requirements and appoint the asset
management company (AMC)
A sponsor ensures compliance with regulatory requirements
They are required to meet the eligibility criteria set by the Securities and
Exchange Board of India (SEBI) and must have a sound track record and
financial standing

Asset Management The AMC is responsible for managing and operating the Collective
Company (AMC) Investment Scheme
They make investment decisions, manage the portfolio, and carry out the
day-to-day activities of the scheme
The AMC must be registered with the Securities and Exchange Board of India
(SEBI)

Trustees The trustees act as custodians of the fund's assets, protect the interests of
the investors, and oversee the activities of the AMC
A trustee ensures that the scheme operates in accordance with the
regulations and trust deed
They must be independent of the sponsor and the AMC and are required to
obtain SEBI's approval for their appointment

Custodian (Optional) A custodian may be appointed to safeguard the securities and other assets
held by the scheme
The custodian ensures proper segregation and safekeeping of assets and
performs related functions as per the regulations
The custodian may also perform related functions as specified by SEBI

Investors The investors are the individuals, institutions, corporate entities, and other
eligible participants who contribute funds to the collective investment
scheme
They pool their money together with other investors to invest in a diversified
portfolio of securities or other assets
Investors can include individuals, institutions, corporate entities, retail
investors, high-net-worth individuals, corporate bodies, trusts, and other
eligible participants

Registrar and Transfer The RTA is responsible for maintaining records of investors, transfer of units,
Agent (RTA) and processing subscriptions and redemption requests
They help in managing the administrative functions of the CIS and ensure
efficient handling of investor transaction

Distributors/ Distributors or intermediaries play a role in marketing, selling, and

Intermediaries distributing the CIS units to the investors
They can be banks, financial institutions, brokers, agents, or other authorised
entities authorised by the AMC
Distributors help in promoting the scheme, assisting investors with the
investment process
They provide information and guidance on the scheme's features and
benefits

Eligibility Criteria for a Collective Investment Scheme

https://www.policybazaar.com/investment-plans/articles/collective-investment-scheme/ 4/7
5/6/24, 8:41 PM Collective Investment Scheme (CIS) - Definition, Features

SEBI defines the eligibility criteria for a Collective Investment Scheme in India. Some of the essential
Sign In
eligibility criteria to join a CIS is as follows:

1 Sponsor Entity Type:

The sponsor should be a corporate body under any of the following-

Registered under the Companies Act, 2013

Limited Liability Partnership (LLP)

It should have the necessary legal status to establish and manage the CIS.

2 Track Record:

The sponsor should have a minimum track record of 5 years in the financial services business

This ensures that the sponsor has relevant experience and a proven track record in handling
financial matters

3 Financial Standing:

The sponsor should have a minimum net worth of Rs. 5 crores

This requirement ensures that the sponsor has sufficient financial stability to support the
establishment and management of the CIS

4 Fit and Proper Criteria:

The sponsor, trustees, and directors of the AMC should have a good reputation, be of sound
mind, and not have been convicted of any economic offences or regulatory violations

The fit and proper criteria ensure that only individuals with integrity and competence are
involved in managing the CIS

5 Registration with SEBI:

Investment
The CIS, along with its Sponsor and AMC, should obtain registration from SEBI Calculator
One time

The registration process involves submitting the necessary application forms, documents, and Monthly

fees to SEBI Amount I wish to invest

₹ 10,000

6 Compliance with Regulations:

Invest for (Years)

10 Till 2034
The CIS, its Sponsor, and AMC must adhere to investment limits, disclosure requirements,
valuation norms, and reporting obligations Stay invested for (Years)

20 Till 2044

They must comply with the investor protection measures specified by SEBI Expected rate of return
(in %)
8 / Year
7 Appointment of Trustees:
You You get
The CIS should appoint trustees who are independent of the sponsor and the AMC invest
₹39.1
₹12 L L
Over 10 After 20
Years Years

https://www.policybazaar.com/investment-plans/articles/collective-investment-scheme/ 5/7
5/6/24, 8:41 PM Collective Investment Scheme (CIS) - Definition, Features

The trustees should obtain prior approval from SEBI for their appointment and should have the
Sign In
necessary qualifications and experience to fulfil their responsibilities View plans

8 Valuation of Assets:

The assets of the CIS should be valued periodically in accordance with the valuation norms
prescribed by SEBI.

The valuation should be fair, transparent, and based on reliable methods to ensure accurate
calculation of the net asset value (NAV) of the scheme

In Conclusion
A Collective Investment Scheme (CIS) in India is a regulated investment vehicle that pools funds from
multiple investors to invest in a diversified portfolio of securities or other assets. The CIS operates
under the rules and regulations set by the Securities and Exchange Board of India (SEBI) to ensure
investor protection, transparency, and compliance. It allows individuals and institutions to access
professional investment management, diversification, and potential returns while adhering to
regulatory requirements.

FAQ's

What is an example of a collective investment scheme?

What is the collective investment scheme under SEBI?

What are the three types of collective investment schemes?

What is a collective investment scheme in competition law?

What is a Collective Investment Management Company?

Can an existing collective investment scheme raise further funds?

How does a collective investment scheme work?

How to register a collective investment schemes?

Disclaimers+

Investment plans articles

Recent Articles Popular Articles

https://www.policybazaar.com/investment-plans/articles/collective-investment-scheme/ 6/7
5/6/24, 8:41 PM Collective Investment Scheme (CIS) - Definition, Features

Sign In

SBI NRI Account How Thanks giving and Black Friday Affect Axis Bank NRI Account
07 Feb 2024
The Indian Stock Market? 11 Oct 2023
23 Nov 2023
The State Bank of India (SBI) NRI account is The Axis Bank NRI Account is a gateway to
designed for Black Friday and Thanksgiving mark the beginning seamless banking
of the holiday

Read more Read more Read more

Insurance Calculators Resources Company

General Insurance SIP Calculator Articles About Us

Life Insurance Income Tax Calculator Customer reviews Sitemap
Term Insurance NPS Calculator Insurance companies Careers
Investment Term Insurance Calculator Newsroom Legal & Admin policies

Health Insurance HLV Calculator Awards ISNP

Other Insurance Life Insurance Calculator PB Life Contact us
Health Insurance Calculator Verify your advisor
Travel Insurance Calculator
Car Insurance Calculator

Bike Insurance Calculator

Payment Methods Secured With Follow us on

Policybazaar Insurance Brokers Private Limited CIN: U74999HR2014PTC053454 Registered Office - Plot No.119, Sector - 44, Gurgaon - 122001, Haryana Tel no. : 0124-4218302 Email ID:
enquiry@policybazaar.com

Policybazaar is registered as a Composite Broker | Registration No. 742, Registration Code No. IRDA/ DB 797/ 19, Valid till 09/06/2024, License category- Composite Broker

Visitors are hereby informed that their information submitted on the website may be shared with insurers.Product information is authentic and solely based on the information received from the insurers.

© Copyright 2008-2024 policybazaar.com. All Rights Reserved.

https://www.policybazaar.com/investment-plans/articles/collective-investment-scheme/ 7/7