Law Relating to Collective Investment Schemes in India & Role of SEBI

A Conventional business model having the potential to grow with the power of nature, standing good even in modern times, through started on the right chords became a noise due to the different tunes while addressing regulatory concerns. CIS which struck the markets in 1990's, primarily were backed by investment into Land and Agro Plantations, connected even the smallest investor especially when the economy and financial markets were passing through turbulent times. Lack of legislation concerning the business model led to exploitation of gullible investors who did not had any control on the day to day activities of the operations. Entrusting it to a risk averse regulator handling high risk investment models kept away not only the existing players but also kept away the future CIS promoters. With strict compliance and regulatory norms they opted to payback than to continue. Few litigated with SEBI exploring loopholes, few went for Hybrid schemes, provoked the govt for blanket legislation of BUDS Act. The judiciary by keeping in view of larger interests fixed loopholes but a lot more is to be done to infuse life in it. which is possible only with customized approach than a common Law.