INVESTMENT OBJECTIVES AND VALUATION POLICIES :

Regulation 43 lays down that the monies collected under any scheme of a mutual fund shall be invested only in securities, money market instruments; privately placed debentures; securitised debt instruments which are either asset backed or mortgage backed securities, gold or gold related instruments or real estate assets, infrastructure debt instrument and assets. Investment shall be made in accordance with the investment objective of the relevant mutual fund scheme. However monies collected under any money market scheme of a mutual fund shall be invested only in money market instruments. Moneys collected under any gold exchange trade fund scheme shall be invested only in gold or gold related instruments, moneys collected under a real estate scheme shall be invested in accordance with Regulation 49E.

Regulation 44 talks about investment, borrowing and connected restrictions. Any investments shall be made subject to the investment restriction specified in the Seventh Schedule to the Regulations which contains 11 clauses. However, seventh schedule does not apply to a gold exchange traded fund scheme.

A mutual fund having an aggregate of securities which are worth Rs. 10 crore or more as on the latest balance sheet date, shall settle their transactions only through dematerialised securities, as per instructions of SEBI. The mutual funds shall not borrow except to meet temporary liquidity needs for the purpose of repurchase, redemption of units or payment of interest or dividend to the unit holders. Such borrowals should not exceed 12% of the net asset value of the scheme and the duration of the borrowing shall not exceed six months. The mutual fund shall not advance any loans for any purpose but may lend securities in accordance with the framework relating to short selling and securities lending and borrowing specified by SEBI.