Certain Collective Investment Scheme(s) (CIS) have come to the notice of SEBI, which were offered by entities not registered with SEBI nor offer document of such schemes have been filed with SEBI. Appropriate actions have been taken against such entities and its Directors and since January 01, 2011, SEBI has passed orders against 91 entities and its Directors, carrying on unregistered CIS. As part of interim directions, SEBI inter-alia directs the entities and its Directors to stop collecting further money under existing / new schemes, not to launch any new scheme or float any new companies/firm to raise fresh money, not to divert or alienate any assets or money collected. As part of final directions, SEBI directs winding up of unregistered schemes of the entities, repayments to investors and inter-alia also debars the entity and its Directors from accessing the Capital markets.
Investors and general public are hereby cautioned that other than “GIFT Collective Investment Management Company Limited” no other entity is registered with SEBI under the CIS Regulations. Further, investors are advised to bear the following cautionary checks before investing in a collective investment scheme:
- Whether the entity is registered with SEBI
- Whether the scheme (CIS) has filed an offer document with SEBI
- Subscription to CIS units is permitted only though a banking channel, no cash transactions are permitted
- No guaranteed or assured returns are permitted (at most, an indicative return may be stated in offer document)
If any of the unregistered entity/ies are found to be collecting / mobilizing money, investors are advised not to subscribe to such schemes and to report the same to SEBI and State authorities including Police authorities immediately, along with appropriate details / documents.