Fund Serve - SCOPE AND BENEFITS

FundServe system is Investor servicing system offered by AMCs (Mutual Fund) for Commercial and Non-Commercial Transactions. Investor can submit Web-based application for subscription and redemption in the scheme and or plan of the mutual fund. The complete customer statement will be generated through this system. Investors can come to Mutual Fund company for investing money into different scheme launched by mutual fund through ISC(Investor Service Center),Broker, Banks, Distributors etc. This system also caters to the Back-Office operation such as Dividend Distribution, systematic withdrawals, Investments, Brokerage Distribution and marketing information

Mutual fund will pay dividend based on profits made for the schemes in which the Investors have invested money. For declaring a dividend the AMC normally will fix up a record date and all those investments received upto the record date will be eligible for the dividend. Mutual Fund company generally declare dividend on the schemes which have a dividend plan and dividends are not declared in growth plans. Mutual Fund will pay Brokerage to Brokers which are involved in Mutual Fund Company for different Transactions such as Purchase, Systematic Investment Plan(SIP) etc. Brokerage can be paid either Upfront payment cases or Annualized. For Upfront payment cases, FundServe System will generate an overall scheme wise subscription amount collected for the period and calculate the brokerage payable on the same. For Annualized cases, broker will get brokerage on by summing up the transactions made which is annually paid and it is divided by 12 to get monthly part of the brokerage.

Mutual Fund will pay incentives and other fees to Investors or Brokers on the basis of Investments made by the Investor or Broker based on Norms and Conditions of Mutual Fund System.

FundServe System will also involve in Non-Commercial Transactions such as Change of Address, Contact, Bank Account Information etc.

FundServe System provides different transactions for investor Purchase Transaction allows Investor to purchase in an Mutual Fund Scheme. The basic objective is to allocate a specific number of units to investors for the amount subscribed by them depending upon the NAV.

Additional Purchase Transaction are those in which existing unit holders purchase addition units of a particular mutual fund.

Lateral Shift Transaction allows existing unit holder to change units from one scheme to another. The objective of a shift for an Investor is to have a change in schemes in a particular mutual fund. Switch Over Transaction allows existing unit holder to change units from one plan to another plan within same scheme. The objective of a switch over is to have a change in plans within same scheme of a particular Mutual Fund scheme. Systematic Investment Plan(SIP) allows investors to invest a minimum amount on a monthly, quarterly or on semi annual basis by providing the company with post dated checks. Mutual Fund company provides unit holders convenience to invest regular sums of money through SIP and thereby making the volatility of the securities market work in favor of the Investor.

Redemption Transaction allows unit holder to withdraw / redeems his holdings in the fund. The Investor can either redeem a specific number of units or a specific amount as per the applicable NAV. Redemption can be done on FIFO or LIFO basis.In FIFO, the first investment will become eligible for redemption and in case of LIFO, the last investment will become eligible for redemption.

Systematic Withdrawal Plan transaction allow investor either opt for getting money back in terms of either capital appreciation or fixed payments. The basic objectives to withdraw on systematic basis i.e. Monthly, quarterly , half yearly and make actual redemption in a convenient manner on future dates. Capital appreciation means that whatever appreciation is received over the invested money, the same is given to the investor either on a monthly, quarterly or any mode the investor opt for. Fixed Payments refers to a fixed monthly amount that the investor wants out of his investment and that payment could be a part of capital. In Capital Appreciation, the investor cannot be given a PDC but in Fixed Withdrawls PDC's can be given to Investor.

Work Flow

Investor will come to Mutual Fund Collection Centers with Application Form duly filled in along with cheque / cash / Demand Draft.

Collection Center will send this Forms and Deposit Slip for the amount collected to Head Office. After Approval of the Application Form, FundServe system will open his/her account. During day end process, FundServe system will calculate number of units based on NAV. Also Dividend and Brokerage is calculated during day end.

Account Statement is generated for each Investor which consists of Investor Name, Address and Contact information, Scheme Name and its Current NAV, Transaction Date and Type e.g. Purchase, Redemption, Amount, Units, Entry/Exit Load, Current Return Percentage. Investor can view its Account Statement online i.e. On Web by logging into the system. He can also put its complaints online through web.

FundServe Systems also provides reporting facility where Investor can get reports for the Transactions made by him. Different reports are generated such as Account Statement for Investor, Transaction wise reports(Purchase, SIP, SPW), Non-Commercial transaction report, reconciliation report etc.