FUNCTIONING OF UNIT TRUST OF INDIA

REASON FOR UTI

It was established due to Unit Trust of India Act,1963 (Act No. 52) An Act to provide for the establishment of a Corporation with a view to encouraging saving and investment and participation in the income, profits and gains accruing to the Corporation from the acquisition, holding, management and disposal of securities

Source: www.commonlii.org
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CONCEPT OF MUTUAL FUNDS

Investments Financial Market Earnings and Appreciation

Mutual Funds Pooling Savings

Small Investors

Returns
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Source: Mutual Funds in India by Nalini Prava Tripathy Pg-48

First Phase (1964-1987)

UTI was set up and functioned under RBI 1978,UTI delinked from RBI Industrial Development Bank of India took over the control from RBI In 1988,UTI had 6700 crores of assets under management

Source: Mutual Funds in India by Nalini Prava Tripathy, Pg 46

Second Phase (1987-1993)

Broadening the base of industry by entry of Mutual Funds sponsored by Commercial Banks and Public Sector Financial Institutions
SBI LIC GIC Canara Bank Bank of India PNB

Number of schemes increased to 164

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Source: Mutual Funds in India by Nalini Prava Tripathy Pg-47

Third Phase (1993-2003)

Entry of Private Sector Mutual Funds Competition in market increased Foreign Players were also allowed Kothari was the first private player Several mergers and acquisitions were seen UTI was way ahead of other Mutual Funds

Source: Mutual Funds in India by Nalini Prava Tripathy Pg-47

Fourth Phase (Since February 2003)

UTI was bifurcated into two separate entities

UTI-I
Placed

under government appointed administrator and government appointed advisers It will not be under the purview of MF regulations

UTI-II
It

was named UTI Mutual Funds Placed under new professional management and ownership It was sponsored by

SBI PNB BOB LIC

Source: Mutual Funds in India by Nalini Prava Tripathy Pg-47

UTI Mutual Funds

UTI Mutual Fund started to pave its path on January 14, 2003 UTI Asset Management Co. Ltd. (UTIAMC), appointed by UTI Trustee Co, Pvt. Ltd. for managing the schemes of

UTI

Mutual Fund The schemes transferred/migrated from the erstwhile Unit Trust of India

Introduction to UTI Mutual Funds (1/3)

UTI Asset Management Company provides back office support for all business services of UTIMF in accordance with the SEBI (Mutual Funds) Regulations and the objectives To ensure a seamless flow across the various activities undertaken by UTIMF

State-of-the-art

systems of IT Communications

Source:www.utimf.com

Introduction to UTI Mutual Funds (2/3)

UTIAMC is also a registered portfolio manager under the SEBI (Portfolio Managers) Regulations, 1993 for undertaking portfolio management services UTIAMC also acts as the manager and marketer to offshore funds

Source:www.utimf.com

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Introduction to UTI Mutual Funds (3/3)

UTIAMC presently manages a corpus of over Rs. 73,588 Crores* as on 30th September 2009 UTI Mutual Fund has a track record of managing a variety of schemes catering to the needs of every class of citizens It has a nationwide network consisting 114 UTI Financial Centres (UFCs) and UTI International offices in London, Dubai and Bahrain With a view to reach to common investors at district level, 1 satellite office have also been opened There are 46 schemes of UTI Mutual Funds**
Source: www.utimf.com *www.amfiindia.com **UTI Fund Watch

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Reliability
UTIMF has consistently reset and upgraded transparency standards All the branches, UFCs and registrar offices are connected on a robust IT network to ensure costeffective quick and efficient service All these have evolved UTIMF to position as a dynamic, responsive, restructured, efficient and transparent entity, fully compliant with SEBI regulations

Source:www.utimf.com
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Vision and Mission

Vision To be the most Preferred Mutual Fund Mission The most trusted brand, admired by all stakeholders The largest and most efficient money manager with global presence The best in class customer service provider The most preferred employer The most innovative and best wealth creator A socially responsible organisation known for best corporate governance
Source : www.utimf.com
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Subsidiaries
UTI Venture Funds UTI International Ltd.

UTI

Investment Management Company (Mauritius) Limited (100% owned by UTI IL) UTI International (Singapore) Private Limited (51% owned by UTI IL)

UTI Retirement Solutions

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Source : www.utimf.com

UTI AMC Structure

Source : uti corporate presentation.pdf

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Organizational Structure

Source : uti corporate presentation.pdf

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Process Flow of UTI

Unit Holders

Sponsors

Trustees

AMC

Mutual Funds

Transfer Agent

Custodians SEBI

Source : www.amfiindia.com

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VARIOUS CHANNEL PARTNERS OF UTI

Custodians Stock Holding Corporation of India Limited Registrars Karvy Computershare Pvt. Ltd. Distributors Foreign and Private Banks PSU Banks Distribution House Post office

Source : www.utimf.com

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Fund Flow Structure

Advisory Decision Making Execution Fund Accounting Control

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Tax Implications (1/2)

According to Section 10(33) of IT Act , tax exemption has been given to income on units of UTI and Mutual funds* Mutual Funds are required to pay distribution tax of 10%* Religious or charitable trust are exempted to pay tax from income of MF** Investment upto 5 lakhs is exempted from wealth tax in Section 5(1A)Wealth Tax Act,1957**

Source: Mutual Funds in India by Nalini Prava Tripathy Pg-*62,**63

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Tax Implications (2/2)

Mutual Funds as a gift are exempted from tax

Gift

should not exceed Rs.30,000 On occasion of marriage exemption is up to Rs.1 lakhs

Source: Mutual Funds in India by Nalini Prava Tripathy Pg-64

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UTI Scam
Scheme named US 64 was Debt oriented instrument was used as Equity oriented instrument in 1995 Invested in Reliance Government intervened in 1998 to prevent the downfall of US 64 UTI freezed the transaction for US 64 for next six months

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Thank You
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