Defined Activities under the umbrella of a Fund Management Entity (FME)
As we delve deeper into the realm of Fund Management Entities (FMEs), variations in their operational activities become clear. Each category of FME, whether Authorised, Registered (Non-Retail), or Registered (Retail), presents a unique spread of activities supervised by their regulatory authority.
Activities Undertaken by an Authorised FME
An Authorised Fund Management Entity (Authorised FME) is endowed with several responsibilities under its jurisdiction.
Venture Capital Schemes
Primarily, Authorised FMEs have the authority to aggregate funds from accredited investors or those investing at least USD 2,50,000 via private placement. They redirect these funds into investments in start-ups, or early-stage venture capital endeavours associated with introducing new products, services, or technology. The target of these investments also extends to businesses dealing with intellectual property rights or new business models. Consequently, Authorised FMEs foster next-gen innovation through Venture Capital Schemes.
Management of Family Investment Funds
Furthermore, Authorised FMEs find their hands busy with the management of Family Investment Funds. These funds, invested in securities, financial products, specified physical assets, and other asset classes approved by the Authority, bring in a distinct spectrum of activities for the Authorised FMEs.
Activities Under the Hood of a Registered FME (Non-Retail)
For a Registered Fund Management Entity (Non-Retail), the playing field is slightly different but nevertheless versatile.
Restrictive Schemes and Portfolio Management Services
Registered FMEs (Non-Retail) are entrusted with the responsibility of pooling funds from accredited investors or those injecting more than USD 1,50,000 via private placement. These funds are then pipelined into investments aimed at securities, financial products, and other asset classes greenlit by the regulatory authority. These investments are made through one or more Restricted Schemes.
Moreover, Registered FMEs (Non-Retail) are also involved in offering Portfolio Management Services, including services for multi-family offices.
Acting as Investment Managers
Other roles encompass their acting as investment managers for private placement of Investment Trusts (REITs and InvITs). By virtue of their registration, they are also permitted to undertake all activities which come under the belt of Authorised FMEs.
Activities Pioneered by a Registered FME (Retail)
Registered Fund Management Entity (Retail) presents another subset of FME category, filled with its special lineup of activities.
Investment in Retail or Restricted Schemes
Primarily, Registered FMEs (Retail) are equipped to pool money from the entire population of investors or specific sections of these investors. These pooled funds are then leveraged to invest in securities, financial products, and approved asset classes through retail or Restricted Schemes.
Public Offers and ETFs
Registered FMEs (Retail) also have the authority to act as investment managers for public offer of Investment Trusts (REITs and InvITs). A distinguishing activity for these FMEs is their capability to launch Exchange Traded Funds (ETFs).
Just like their Non-Retail counterparts, Registered FMEs (Retail) can also undertake all activities permissible for Authorised FMEs and Registered FMEs (Non-Retail).
In summary, every category of FME plays a significant role in shaping the financial investment landscape, each with its unique set of permissible activities. This diversified role-play not only keeps the financial system dynamic but also accommodates a broad range of investor requirements.
