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FUNCTIONING

OF

UNIT TRUST OF INDIA

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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 anddisposal of securities

Source: www.commonlii.org 2

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CONCEPT OF MUTUAL FUNDS

Mutual Funds

Financial Market

Small Investors

Returns

Investments

Pooling Savings

Earnings and

Appreciation

3Source: Mutual Funds in India by Nalini Prava Tripathy Pg-48

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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 464

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Second Phase (1987-1993)

Broadening the base of industry by entry of MutualFunds sponsored by Commercial Banks and PublicSector Financial Institutions

SBI LIC

GIC

Canara Bank

Bank of India PNB

Number of schemes increased to 164


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Third Phase (1993-2003)

Entry of Private Sector Mutual Funds

Competition in market increased

Foreign Players were also allowedKothari was the first private player

Several mergers and acquisitions were seen

UTI was way ahead of other Mutual Funds


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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


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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

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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

9Source:www.utimf.com

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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


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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**

11

Source: www.utimf.com

*www.amfiindia.com**UTI Fund Watch

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ReliabilityUTIMF has consistently reset and upgraded

transparency standards

All the branches, UFCs and registrar offices are

connected on a robust IT network to ensure cost-

effective 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


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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

13Source : 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 byUTI IL)

UTI Retirement Solutions


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UTI AMC Structure

15Source : uti cor orate resentation. df

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Organizational Structure

16Source : uti corporate presentation.pdf

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Process Flow of UTI

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Sponsors

AMCTrustees

Mutual Funds Transfer Agent

Custodians

SEBI

Unit Holders

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


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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 , taxexemption has been given to income on units of

UTI and Mutual funds*

Mutual Funds are required to pay distributiontax 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 20

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Tax Implications (2/2)

Mutual Funds as a gift are exempted from taxGift should not exceed Rs.30,000

On occasion of marriage exemption is up to Rs.1

lakhs


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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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29230088-UTI

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