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Collective Investment Scheme (CIS) – Quiz for Test

COLLECTIVE INVESTMENT SCHEME (CIS)

When the funds available with various investors are pooled together for investment, this is done through Collective Investment Schemes to share the returns.

According to Section 11AA of the SEBI Act, CIS is any scheme or arrangement, which satisfies the following conditions:

– the contributions, or payments made by the investors, by whatever name called, are pooled and utilized solely for the purposes of the scheme or arrangement;
– the contributions or payments are made to such scheme or arrangement by the investors with a view to receive profits, income, produce or property, whether movable or immovable, from such scheme or arrangement;
– the property, contribution or investment forming part of scheme or arrangement, whether identifiable or not, is managed on behalf of the investors;
– the investors do not have day to day control over the management and operation of the scheme or arrangement.

This type of funds are created to lower the costs of raising funds by achieving the economies of scale. The pooled funds are grouped into Master trust account under the control of the bank, which acts as trustee, guardian, executor or administrator.

Here is a quiz to clear the various aspects related to Collective Investment Scheme (CIS). Take the quiz to check your Knowledge on collective Investment Scheme (CIS).

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