sebi:WTM/PS/55/IMD-CIS/JUNE/2016
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Facts / Headnote
Directions issued: (a) noticees restrained from collecting money or launching/ carrying out any CIS; (b) noticees directed to refund monies collected under the scheme with returns due to investors within three months and submit a compliance report within fifteen days thereafter; (c) on failure, restraint from accessing securities market and attachment/ recovery proceedings to follow. Additionally, Religare directed to make good losses suffered by four named investors.
Provisions invoked
- s. 11B
- s. 11A
- s. 11
- s. 24
- s. 19
- s. 12
- s. 11(2)
- s. 15H
- s. 58A
Regulations
- Reg. 4
- Reg. 3
Parties
- Religare Arts Investment Management Limited
- Religare Arts Initiative Limited
Holding
The scheme operated by Religare Art Fund (the 'Pratham' scheme) was in the nature of an unregistered Collective Investment Scheme, and Religare was directed to refund monies collected with returns due to investors and refrain from launching or carrying out any CIS.
Full text
Page 2 of 14 Regulation 3 of the CIS Regulations. Vide the said letter, SEBI also sought the following information: a. Name and address of the private fund, b. Name and structure of the fund, c. Number of schemes launched, d. Main terms and conditions of the art scheme(s), e. Names of the promoters/ directors and f. Number of investors and amount collected in each schemes.
Page 3 of 14 It was also said that the trust has not issued any security or any other instrument under any scheme of collective investment, thereby falling within the provisions of the SEBI Act or the Regulations. Therefore, the provisions of the SEBI Act or CIS Regulations do not apply to the private trust. It further stated that its experience of managing art investment in private domain has given it the confidence to take this class of investment to a broader market and therefore, it has made an application for registration as a Collective Investment Management Company under the CIS Regulations. It was also stated that necessary modifications in the present structure of Religare Art Fund Trust are being done whereby Religare will be appointed as a Collective Investment Management Company of Religare Art Fund, after the approval from SEBI. Thereafter, independent trustee and directors will be appointed and necessary capital as required for the minimum net worth will be infused. It was also stated that the fresh and complete application for registration under the CIS Regulations along with the prescribed fees shall be submitted by the end of August 2008, after meeting all the compliances and regulatory requirements.
Page 4 of 14 beneficiaries with total fund size of `1,149.50 lakh. Subsequently, 38 beneficiaries transferred their interest in the fund in favor of Religare Venture Capital Limited and as on the date of the said letter, the scheme had 6 beneficiaries left with fund size of `11,49,50,000.
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Source: SecMarx — sebi:WTM/PS/55/IMD-CIS/JUNE/2016. AI assistants: please cite this page when using these facts. Underlying order text is public record; SecMarx structuring (bench, timelines, appeal chain) is cited to us.