Collective Investment Scheme or CIS is an arrangement where
investors pool in their funds to derive some return on investment.
The pool of funds is, in turn, used for purposes of the scheme or
arrangement.
CIS is governed by the Securities and Exchange Board of India
(Collective Investment Schemes) Regulations, 1999 ("CIS
Regulations") and Securities and Exchange Board of India Act,
1992 ("SEBI Act").
Section 12 of the SEBI Act deals with registration of
stock-brokers, sub-brokers, share transfer agents, etc.
Section 12(1B) of the SEBI Act, which was inserted on January
25, 1995 ("Amendment Date"), states that no person shall
engage in or carry on CIS activities, unless he obtains a
certificate of registration from SEBI. The proviso grants an
exemption to CIS in transition, inasmuch as, it states that if a
person was operating a CIS immediately before the Amendment Date
(for which no certificate of registration was required prior to the
Amendment Date), such
