Procedure for Registration of Collective Investment Scheme (CIS) with SEBI

Ronak Sharma

Ronak Sharma

Published on: Apr 3, 2026

Priya Gandhi

Updated on: Apr 3, 2026

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Introduction

Collective Investment Scheme (CIS) means any scheme or arrangement made or offered by any company, under which the contributions, or payments made by the investors, are pooled and utilised with a view to receive profits, income, produce or property, and is managed on behalf of the investors is a Collective Investment Scheme (CIS). Investors do not have day to day control over the management and operation of such scheme or arrangement.

Collective Investment Scheme in India is regulated by Securities and Exchange Board of India under Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999.

Applicable Provisions

Regulation 3, 4, 4A, 6, 7, 8, 9, 9A, 10, 11, 13, 14 of Securities and Exchange Board of India (Collective Investment Schemes) Regulations, 1999

Mandatory Requirements

1. Applicant shall be:
   • Company registered under the Companies Act, 1956
   • Having management of collective investment schemes as a main object in its Memorandum of Association
2. Applicant or promoters shall:
   • Have a sound track record and reputation of fairness and integrity
   • Operate in the relevant financial services field for at least 5 years
   • Maintain positive NW for the preceding 5 years and minimum NW of Rs. 50 crores (Rs. 100 crores if profits not achieved for 5 consecutive years) and earned profits in at least 3 out of the last 5 years
   • Be fit and proper person
3. Directors and key personnel must have honesty, integrity, and adequate professional experience
4. No convictions for moral turpitude, economic offenses, or violations of securities laws
5. At least 50% of directors shall be independent
6. At least one non-retiring director shall be a trustee representative
7. Adequate infrastructure to operate CIS in compliance with SEBI regulations
8. No person connected with the applicant shall have past rejection of registration or disciplinary action by SEBI
9. No individual or group shall hold ≥10% in multiple CIS management companies or trustee companies
10. No board representation in multiple CIS management companies or trustee companies

Procedure for Registration

1. Ensure Meeting Capital Adequacy and Net Worth Requirements:
   Applicant seeking registration as Collective Investment Scheme (CIS), must ensure a minimum NW of Rs. 50 Crore, which must be maintained on an ongoing basis throughout the period of registration.
2. Filing of Application Form
   Applicant proposing to carry on activity as a Collective Investment Management Company is required to file Application Form in Form A (Application for Grant of Registration as Collective Investment Management Company) to Securities and Exchange Board of India along with:
   • Supporting Documents as specified in First Schedule and
   • Non-Refundable Application Fees, as specified in Second Schedule.
3. Regulatory Authority to Seek Clarifications:
   
   • SEBI can demand any additional information or clarification it deems necessary.
   • If requested by SEBI, the applicant (or its designated principal officer) must appear before the Board for a personal representation.
   • SEBI can reject the application if it finds grounds to do so. However, the applicant will be given a fair chance to be heard before the rejection is finalized.
   • The rejection decision must be communicated to the applicant within 30 days.
4. Grant of Certificate of Registration:
   Once SEBI is satisfied the applicant is eligible for registration, it will issue the Certificate of Registration in Form B to the applicant of collective investment scheme. The certificate is valid indefinitely unless it is later suspended or cancelled by SEBI.
5. Key Points for Collective Investment Scheme:
   • Collective Investment Scheme shall:
     • Abide by the Code of Conduct as specified in Third Schedule
     • Pool funds from multiple investors for the purpose of investment in a common project or asset class
     • Be managed by a professional entity (CIS operator) responsible for administering the scheme and making investment decisions
     • Ensure that contributions of investors are utilized strictly for the objectives stated in the offer document
     • Provide returns to investors based on the performance of the underlying assets or projects
     • Maintain transparency through proper disclosures, periodic reporting, and record keeping
     • Exercise high levels of due diligence and care when handling assets
     • Remain liable to unit holders for any “acts of omission or commission,” regardless of any conflicting contracts
     • Take full responsibility for the actions of employees or third-party service providers
     • Prevent staff from using their positions or insider information for personal gain or to harm the scheme
     • Prohibited from transacting with associates/relatives. If a transaction does occur, it must be reported immediately to the Trustee and the Board
     • Maintain adequate insurance coverage for all scheme properties
   • Hold board meetings at least twice every three months to review scheme affairs
   • Collective Investment Management Company shall abstain from:
     • Undertaking any activity other than that of managing the collective investment scheme
     • Acting as a trustee of any collective investment scheme
     • Launching any collective investment scheme for the purpose of investing in securities
     • Investing in any collective investment scheme floated by it.

Abbreviations Used

1. SEBI: Securities and Exchange Board of India
2. CIS: Collective Investment Scheme
3. KYC: Know Your Client
4. NW: Net Worth