DIRECT TAXES CIRCULAR - Sec. 10(23D)

SECTION 10(23D) l income OF MUTUAL FUNDS

142. Exemption of income of Mutual Fund set up by any public sector bank or public financial institution - Notified Mutual Funds

NOTIFICATION 1

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies SBI Mutual Fund set up by State Bank of India, a bank constituted under the State Bank of India Act, 1955 (23 of 1955) and CANBANK Mutual Fund set up by Canara Bank being a corresponding new bank under Column 2 of the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), as Mutual Funds of public sector banks for the purpose of the said provision.

Notification : No. SO 1064(E), dated 18-11-1988.

NOTIFICATION 2

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies LIC Mutual Fund set up by the Life Insurance Corporation of India, a corporation established by the Life Insurance Corporation Act, 1956 (31 of 1956), as the Mutual Fund of public financial institutions for the purposes of the aforesaid provision.

Notification : No. SO 477(E), dated 22-6-1989.

NOTIFICATION 3

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies The India Magnum Fund N.V. Mutual Fund set up by State Bank of India, a Bank constituted under the State Bank of India Act, 1955 (23 of 1955) as the Mutual Funds of public sector banks for the purpose of the said provision.

Notification : No. SO 750(E), dated 21-9-1989.

NOTIFICATION 4

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Indian Bank Mutual Fund set up by Indian Bank being a corresponding new bank under column 2 of the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), as Mutual Funds of public sector banks for the purpose of the said provision.

Notification : No. SO 268(E), dated 29-3-1990.

NOTIFICATION 5

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies PNB Mutual Fund set up by Punjab National Bank, being a corresponding new bank under column 2 of the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), as Mutual Funds of public sector banks for the purpose of the said provision.

Notification : No. SO 577(E), dated 20-7-1990.

NOTIFICATION 6

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies BOI Mutual Fund set up by Bank of India, being a corresponding new bank under column 2 of the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), as Mutual Funds of public sector banks for the purpose of the said provision.

Notification : No. SO 578(E), dated 20-7-1990.

NOTIFICATION 7

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the Asian Convertibles and Income Fund Mutual Fund set up by State Bank of India, a bank constituted under the State Bank of India Act, 1955 (23 of 1955) as the Mutual Fund of a public sector bank for the purposes of the said clause.

Notification : No. SO 778(E), dated 11-10-1990.

NOTIFICATION 8

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies GIC Mutual Fund, set up by the General Insurance Corporation of India, a body corporate incorporated under the provisions of the Companies Act, 1956 (1 of 1956) and its four wholly owned subsidiaries incorporated under the provisions of the Companies Act, 1956, namely, National Insurance Company Limited, New India Assurance Company Limited, Oriental Insurance Company Limited and United India Insurance Company Limited, as a Mutual Fund of a public financial institution for the purposes of the said clause for the assessment year 1991-92 and subsequent assessment years.

Notification : No. SO 151(E), dated 28-2-1991.

NOTIFICATION 9

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Canbank (Offshore) Mutual Fund set up by Canara Bank, being a corresponding new bank under column 2 of the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), as Mutual Fund of a public sector bank for the purposes of the said clause.

Notification : No. SO 20(E), dated 8-1-1992.

NOTIFICATION 10

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies BOE Mutual Fund set up by the Bank of Baroda, being a corresponding new bank under column 2 of the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), as a Mutual Fund of public sector bank for the purpose of the said clause.

Notification : No. SO 122(E), dated 24-2-1993.

NOTIFICATION 11

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies ICICI Mutual Fund set up under a Trust Deed, dated 25th August, 1993, by the Industrial Credit and Investment Corporation of India Limited, a public financial institution under section 4A of the Companies Act, 1956, as a Mutual Fund of a public financial institution for the purpose of the said clause.

Notification : No. SO 825(E), dated 29-10-1993.

NOTIFICATION 12

In exercise of the powers conferred by clause (23D) of section 10 of the Income- tax Act, 1961 (43 of 1961), the Central Government hereby specifies Indbank Offshore Mutual Fund set up under a trust deed, dated June 27, 1993, by the Indian Bank, a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), as a mutual fund for the purpose of the said clause.

Notification : No. SO 933(E), dated 6-12-1993.

NOTIFICATION 13

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Commonwealth Equity Fund Mutual Fund set up by the Canara Bank, being a corresponding new bank under column 2 of the First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), as a Mutual Fund of Public Sector Banks for the purpose of the said provision.

Notification : No. SO 934(E), dated 6-12-1993.

NOTIFICATION 14

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Kothari Pioneer Mutual Fund authorised by the Securities and Exchange Board of India as a Mutual Fund for the purposes of the said clause.

Notification : No. SO 232(E), dated 18-3-1994.

NOTIFICATION 15

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Taurus Mutual Fund authorised by the Securities and Exchange Board of India and registered in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), as a Mutual Fund for the purposes of the said clause.

Notification : No. SO 251(E), dated 24-3-1994.

NOTIFICATION 16

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Morgan Stanley Mutual Fund authorised by the Securities and Exchange Board of India and registered in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), as a Mutual Fund for the purposes of the said clause.

Notification : No. SO 280(E), dated 31-3-1994.

NOTIFICATION 17

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Apple Mutual Fund authorised by the Securities and Exchange Board of India and registered in accordance with Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), as a Mutual Fund for the purposes of the said clause.

Notification : No. 9630 [F.No. 149/73/94-TPL], dated 13-10-1994.

NOTIFICATION 18

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies CRB Mutual Fund authorised by the Securities and Exchange Board of India and registered in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), as a Mutual Fund for the purposes of the said clause.

Notification : No. SO 874(E), dated 6-12-1994.

NOTIFICATION 19

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Shriram Mutual Fund set up under a trust deed dated 27th May, 1994, by Shriram Investments Limited, and registered with Securities and Exchange Board of India under rule 9 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 vide Registration Code MF/017/94/4, dated 21st November, 1994, as a Mutual Fund for the purpose of the said clause.

Notification : No. SO 924(E), dated 22-12-1994.

NOTIFICATION 20

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies 20th Century Mutual Fund set up by 20th Century Finance Corporation Limited and authorised by the Securities and Exchange Board of India and registered in accordance with the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 made under the Securities and Exchange Board of India Act, 1992 (15 of 1992), as a Mutual Fund for the purpose of the said clause.

Notification : No. SO 52(E), dated 18-1-1995.

NOTIFICATION 21

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Birla Mutual Fund set up under a trust deed dated 16th December, 1994, between Birla Growth Fund Limited and Birla Capital International Trustee Company Limited, and registered with Securities and Exchange Board of India under regulation 9 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 vide Registration Code MF/020/94/8, dated 23rd December, 1994, as a Mutual Fund for the purpose of the said clause.

Notification : No. SO 83(E), dated 6-2-1995.

NOTIFICATION 22

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies J.M. Mutual Fund set up under a trust deed dated 1st September, 1994, by J.M. Financial & Investment Consultancy Services Limited and J.M. Share & Stock Brokers Limited, and registered with Securities and Exchange Board of India under regulation 9 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 vide Registration code MF/015/94/8, dated 15th September, 1994 as a Mutual Fund for the purpose of the said clause.

Notification : No. SO 101(E), dated 16-2-1995.

NOTIFICATION 23

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies IDBI Mutual Fund set up under a trust deed dated 25-11-1994, by IDBI Investment Management Company Limited, and registered with Securities and Exchange Board of India under regulation 9 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 vide Registration code MF/019/94/8, dated 13th December, 1994, as a Mutual Fund for the purpose of the said clause.

Notification : No. SO 182(E), dated 10-3-1995, as amended by Notification No. SO 817(E), dated 25-9-1995.

NOTIFICATION 24

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Indbank Communications (Offshore) Fund set up under the Trust Deed dated 6th September, 1994 by Indian Bank and approved by the Securities and Exchange Board of India, as an offshore Mutual Fund for the purpose of the said clause.

Notification : No. SO 872(E), dated 3-11-1995, as amended by Notification No. SO 379(E), dated 14-5-1997.

NOTIFICATION 25

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies HB Mutual Fund set up under the Trust Deed dated 4th October, 1994 between HB. Portfolio Leasing Limited and HB Trust Limited, and registered with Securities and Exchange Board of India under regulation 9 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 vide registration code MF/016/94/6, dated 26th October, 1994 as a Mutual Fund for the purpose of the said clause.

Notification : No. SO 696(E), dated 8-10-1996.

NOTIFICATION 26

In exercise of the powers conferred by clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Alliance Capital Mutual Fund set up under the trust deed dated the 27th December, 1994 between Alliance Capital Management Corporation of Delaware, United States of America and Mr. Dave H. Williams, United States of America; Mr. John D. Carifa, United States of America; Mr. Gopi Arora, India; and Mr. Deepak S. Parekh, India, and registered with the Securities and Exchange Board of India under regulation 9 of the Securities and Exchange Board of India (Mutual Funds) Regulations, 1993 vide registration code MF/021/95/3, dated the 30th December, 1994 as a Mutual Fund for the purpose of the said clause.

Notification : No. SO 120(E), dated 18-2-1997.

NOTIFICATION 27

In exercise of the powers conferred by sub-clause (ii) of clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Indbank Invesco (Offshore) Fund, set up under Trust Deed dated 31-7-1996 by Indian Bank and approved by the Securities and Exchange Board of India as on Offshore Mutual Fund for the purpose of the said sub-clause.

Notification : No. 10810 [F. No. 194/8/96-IT (A-I)], dated 3-3-1999.

NOTIFICATION 28

In exercise of the powers conferred by sub-clause (ii) of clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies Indbank Invesco (Offshore) Fund, set up under Trust Deed dated 31-7-1996 by Indian Bank and approved by the Securities and Exchange Board of India as an offshore Mutual Fund for the purpose of the said sub-clause.

The notification shall be subject to the following conditions:

(i) The notification will be valid till the time, the Indian Bank continues to be the ‘Trustee’. In the event of Indian Bank seeking retirement or its removal by Invesco India Growth Fund Limited as Trustee, the Notification will become null and void;

(ii) the notification will be subject to the fulfilment of the conditions imposed by Indbank Invesco (Offshore) Fund or which may be imposed by Reserve Bank of India or Securities and Exchange Board of India;

(iii) the amount to be invested in the units of the Mutual Fund shall be remitted to India through normal banking channels or bank certificate(s) showing the funds receipts from abroad for investment in the units under the schemes may be submitted to Reserve Bank of India; and

(iv) trustee fees, custodian fees, and other such fees payable to Indbank Merchant Banking Services Limited, a subsidiary of Indian Bank and Administrator to the Mutual Fund shall be repatriated to India through normal banking channels.

Notification: No. SO 138(E), dated 3-3-1999.

Notification 29

In exercise of the powers conferred by sub-clause (ii) of clause (23D) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies ABN Amro Bank Money Market Mutual Fund, set-up by the ABN Amro Bank N.V. 302, Dalamal House, Nariman Point, Mumbai - 400121 and authorised by the Reserve Bank of India, as a money market mutual fund for the purposes of said clause subject to the conditions specified in the Annexure to this notification.

Annexure

Conditions to be complied with by the ABN Amro Bank Money Market Mutual Fund

1. Eligibility to set up ABN Amro Bank Money Market Mutual Fund - The ABN Amro Bank Money Market Mutual Fund shall comply with, the guidelines issued by the Reserve Bank of India from time to time, and, the conditions imposed by the Reserve Bank of India while authorising the ABN Amro Bank for setting up of a Money Market Mutual Fund as a department of that Bank and such bank shall ensure that there is no infringement of the same.

2. Structure of the ABN Amro Bank Money Market Mutual Fund

2.1 The ABN Amro Bank Money Market Mutual Fund shall be set up departmentally in the form of a department of the ABN Amro Bank, wherein the assets and liabilities of the ABN Amro Bank Money Market Mutual Fund would form part of the eligible institutions’ balance sheet.

2.2 The ABN Amro Bank Money Market Mutual Fund shall be operated as Money Market Deposit Accounts (hereinafter referred to as MMDAs). MMDAs schemes shall be operated either by issuing deposit receipt or through issue of pass book without cheque book facility. The ABN Amro Bank Money Market Mutual Fund may float both open-ended and close-ended schemes.

2.3 The day-to-day management of the schemes under the ABN Amro Bank Money Market Mutual Fund shall be managed by a separate Fund Manager and the said Fund shall be set-up as a department of the ABN Amro Bank.

2.4 The ABN Amro Bank Money Market Mutual Fund may formulate special schemes as per their requirements subject to the guidelines stipulated by the Reserve Bank of India. The ABN Amro Bank Money Market Mutual Fund shall forward the details of such scheme together with copies of offer letter and application form, etc., to the Reserve Bank of India at least one month before announcing the launching of any scheme.

3. Who can subscribe - The investors of the ABN Amro Bank Money Market Mutual Fund shall be such investors who are eligible to subscribe to units of other Mutual Funds in accordance with the regulations made by the Securities and Exchange Board of India established under the Securities and Exchange Board of India Act, 1992 (15 of 1992). However, in respect of investments by non-resident investors, the dividend or income on such subscriptions shall be allowed to be repatriated in accordance with the law for the time being in force. The principal amount of subscription shall not be allowed to be repatriated outside India.

4. Minimum size of investment by a single investor - The ABN Amro Bank Money Market Mutual Fund may determine the minimum size of investment by a single investor.

5. Investment objectives and policies - The investment objectives and policies of the ABN Amro Bank Money Market Mutual Fund shall be laid down by the sponsor Bank that is the ABN Amro Bank and every scheme to be launched by the ABN Amro Bank Money Market Mutual Fund shall be in accordance with such broad objectives and policies and the rules and regulations framed by the Reserve Bank of India in this behalf. While inviting the subscription from the public, the ABN Amro Bank Money Market Mutual Fund shall make a clear statement of investment objectives of the ABN Amro Bank Money Market Mutual Fund and its investment policies and also of the terms and conditions of the Scheme launched by it. The ABN Amro Bank Money Market Mutual Fund shall not give any guarantee or indication as to the rate of return on investments while accounting any scheme.

6. Investments by ABN Amro Bank Money Market Mutual Fund

6.1 The resources mobilised by the ABN Amro Bank Money Market Mutual Fund shall be invested exclusively in the following money market instruments, namely:—

(a) treasury bills and dated Government Securities having an unexpired maturity up to one year;

(b) call/notice money;

(d) commercial bills arising out of genuine trade/commercial transactions and accepted/co-accepted by banks;

(e) certificates of deposits;

(f) rated corporate bonds and debentures with a residual maturity of up to one year.

6.2 The limits of the investment of the ABN Amro Bank Money Market Mutual Fund in the said instruments shall be as follows:—

Instruments		Limit (per cent of resources of ABN Amro Bank Money Market Mutual Fund)
(a)	Treasury Bills and dated Government Securities having an unexpired maturity up to one year	No limit.
(b)	Call/Notice Money	No limit.
(c)	Commercial Paper	No limit.
(d)	Commercial Bills arising out of genuine trade/commercial transactions and accepted/co-accepted by Banks.	No limit.
(e)	Certificates of Deposit		No limit.
(f)	Rated corporated bonds and debentures with a residual maturity of up to one year.	No limit.	(Provided that the investment in commercial paper together with rated corporate bonds and debentures with a residual maturity of up to one year in an individual company should not exceed three per cent of the resources of the ABN Amro Bank Money Market Mutual Fund.)

6.3 The investments shall be made in accordance with the prudential guidelines which may be issued by the Reserve Bank of India from time to time. The ABN Amro Bank Money Market Mutual Fund shall not deploy their funds in capital market instruments so that their investments are not exposed to undue risk.

6.4 Switching of assets between schemes shall be at market rate and based on conscious investment decision.

6.5 The borrowing and lending between schemes of the ABN Amro Bank Money Market Mutual Fund as also between the ABN Amro Bank Money Market Mutual Fund and the sponsoring institutions are prohibited.

7. Delivery of instruments - The ABN Amro Bank Money Market Mutual Fund shall invariably take delivery of money market instruments purchased and give delivery of the instruments sold.

8. Reserve requirements - In the case of the ABN Amro Bank Money Market Mutual Fund set up by the bank, the resources mobilised by them shall not be considered as part of their net demand and time liabilities and as such, these resources would be free from any reserve requirements.

9. Minimum lock-in-period and repurchase - The minimum lock-in-period for investments in the ABN Amro Bank Money Market Mutual Fund shall be fifteen days. The ABN Amro Bank Money Market Mutual Fund shall be free to offer repurchase facilities to the investors subject to the minimum lock-in-period. The details of the repurchase facility including the procedures shall be made clear in the offer document.

10. Insurance cover - The funds invested in the ABN Amro Bank Money Market Mutual Fund shall not have insurance cover from the Deposit Insurance and Credit Guarantee Corporation of India and this fact shall be clearly brought out in the offer documents by the ABN Amro Bank Money Market Mutual Fund.

11. Application form - The ABN Amro Money Market Mutual Fund may devise suitable application form for subscribing to their schemes.

12. Deposit Receipt/Pass book - The ABN Amro Bank Money Market Mutual Fund shall be operated as a Money Market Deposit Account by issue of statement of account without cheque book facility, and such Deposit Account shall be signed by two or more authorised signatories.

13. Regulation of the ABN Amro Bank Money Market Mutual Fund - The Reserve Bank of India, may, in the interest of banking policy and public interest, issue direction, call for any information, inspect the books and accounts of the ABN Amro Bank Money Market Mutual Fund.

14. Accounting

14.1 The accounts of the ABN Amro Bank Money Market Mutual Fund shall be kept distinct and separate from those of the parent institution. In the case of “In-house” ABN Amro Bank Money Market Mutual Fund, it shall be ensured that there is no conflict of interest between the ABN Amro Bank Money Market Mutual Fund and its parent organisation. The transfer of assets between ABN Amro Bank Money Market Mutual Fund and the sponsoring institution shall be at market rate and shall be subject to the approval of the sponsoring institution’s Board.

14.2 Separate books of account maintained as aforesaid shall be audited by the qualified auditor other than the auditor of the ABN Amro Bank. The abridged version of the accounts along with the reports of the auditors shall be published for the information of investors. The ABN Amro Bank Money Market Mutual Fund shall be set up as a department of the ABN Amro Bank and the assets and liabilities of the Fund shall form part of the balance sheet of ABN Amro Bank.

14.3 The investment pattern, accounting and valuation of assets, calculation of net asset value shall be subject to regulations made or guidelines issued by the Reserve Bank of India and the Securities and Exchange Board of India.

15. Statement of accounts and disclosure -

15.1 The ABN Amro Bank Money Market Mutual Fund shall maintain separate accounts of each scheme launched by it, segregating the assets under each scheme.

15.2 The ABN Amro Bank Money Market Mutual Fund shall prepare an annual statement of accounts in respect of each of their schemes which shall contain, inter alia, statements of assets and liabilities and income and expenditure account duly audited by qualified auditors, other than the auditors of the parent organisation. An abridged version of the annual accounts together with the reports of the auditors should be published for the information of subscribers to the concerned schemes.

16. Management of ABN Amro Bank Money Market Mutual Fund - “In house” ABN Amro Bank Money Market Mutual Fund shall take adequate and effective measures to ensure that management, accounting and custody of their assets shall be kept distinct and separate from those relating to the ABN Amro Bank.

17. Net asset value - The ABN Amro Bank Money Market Mutual Fund shall calculate Net Asset Value (NAV) of each scheme and disclose the NAVs periodically for the benefit of the investors. To start with, the ABN Amro Bank Money Market Mutual Fund may determine and disclose Net Asset Value once in a week. Thereafter, the Net Asset Value may be determined twice in a week or even daily. The method to be followed for calculation of Net Asset Value should be disclosed in the offer letter of each scheme.

18. Expenses - The total expenses of the ABN Amro Bank Money Market Mutual Fund including pre-issue expenses, management fees, etc., shall be kept at reasonable levels and shall be disclosed fully in the Fund’s annual reports and balance sheets.

19. Furnishing reports to Reserve Bank of India - The sponsor ABN Amro Bank should furnish to Reserve Bank of India, in duplicate, the following reports on a regular basis, namely:—

(a) quarterly report indicating the performance of the ABN Amro Bank Money Market Mutual Fund as a whole and each scheme thereof;

(b) audited annual statement of accounts, together with the reports of the auditors;

(c) scheme-wise details of investment portfolio of the ABN Amro Bank Money Market Mutual Fund, value of such investments, changes in the portfolio since the annual report and asset-wise exposure;

(d) specific information on investments in certain segments of the money market as may be called for by the Reserve Bank of India.

20. Guidelines of Reserve Bank to be applicable - The ABN Amro Bank shall operate the ABN Amro Bank Money Market Mutual Fund as Money Market Deposits Accounts in accordance with guidelines issued by the Reserve Bank of India.

21. Organisation structure of the ABN Amro Bank Money Market Mutual Fund -

21.1 The Money Market Deposit Account shall be managed by the Fund Manager who will be supported by the Fund Administration Officer and back office personnel. The Fund Manager will report to the Country Manager - India.

21.2 The Fund Manager shall be responsible for the following activities, namely:—

(a) Buying and selling of securities;

(b) Customer Interface;

(d) Compliance;

(e) Reporting to the Supervisory Committee which shall include Country Manager, India, Country Treasurer and Chief Manager, Relationship Banking.

21.3 The Supervisory Committee shall oversee the Fund with regard to the following :—

(a) Launch of the Scheme;

(b) Compliance with the Regulations;

(d) Investment decisions;

(e) Risk Management;

(f) Accounting and Investor servicing.

22. Investment objectives - The objective of the ABN Amro Bank Money Market Mutual Fund is to provide an additional short-term investment option to the investors with maximum possible yields and minimal risks. The bank shall use its treasury expertise for the optimum utilisation of funds.

23. Details of the Schemes

23.1 The ABN Amro Bank Money Market Mutual Fund shall float, first an open-ended Scheme. The minimum amount of subscription in the Initial Public Offering shall be rupees ten thousand only or in multiples thereof. The Money Market Deposit Account shall be sold and repurchased at Net Asset Value related price after the Scheme becomes open. The initial lock-in-period shall be fifteen days.

23.2 The applicable Net Asset Value for the purpose of sale or repurchase of units shall be the Net Asset Value as on the date of receipt of application for sale or repurchase.

23.3 The details of the scheme shall be subject to approval of the Reserve Bank of India.

24. General Conditions

24.1 Any mutual fund scheme launched by the ABN Amro Bank Money Market Mutual Fund shall not offer any indicative returns to the investors.

24.2 The investment under the scheme shall not be made in securitised debt.

24.3 The scheme shall clearly indicate that the deposit insurance from Deposit Insurance and Credit Guarantee Corporation of India shall not be available to the funds invested in the Money Market Deposit Account.

24.4 The offer of loan facility against the balances in the Money Market Deposit Account, shall be with the prior approval of Reserve Bank of India.

24.5 The bankers’ acceptance, in which the proposed Money Market Deposit Account Scheme proposes to invest, should arise out of genuine trade or commercial bills only.

24.6 The ABN Amro Bank Money Market Mutual Fund shall comply with the prudential norms on investment in commercial papers and rated corporate bonds and debentures with residual maturity of up to one year as specified by the Reserve Bank of India in its circulars issued from time to time.

25. The ABN Amro Bank Money Market Mutual Fund shall comply with such further conditions as may be imposed by the Reserve Bank of India for operating as a Money Market Mutual Fund.

26. All the conditions specified shall be monitored by the Reserve Bank of India and the Reserve Bank of India shall ensure compliance with the conditions specified in this notification and the conditions which may be specified by it under paragraph 25.

Notification: No. SO 565(E), dated 8-7-1999.