NRI Investment In Equities

NRIs are allowed to invest in Indian stock market under the Portfolio Investment Scheme -through the secondary market.

• Open a bank account with approved designated bank branch

• Take approval of designated bank for investment in Indian Stock Market. Kotak Mahindra Bank is amongst one of the designated branch for issuing RBI Approval which is called PIS (Port folio investment scheme)

• Open a Demat Account with a Depository Participant

• Open a Trading account with a SEBI registered broker to execute trades on your behalf on the Exchange Kotak Neo is privileged to provide the above facilities under one umbrella to its client and provide seamless/integrated investment experience only thing you do is fill up the details in the form above.

• Daily Square Off is not allowed for NRI i.e. intraday trades are not allowed for NRI clients.

• Clients can trade only on Delivery basis.

• All contract notes of either Buy or Sell has to be reported to Authorised Dealer ( PIS Banker) within 24 hours to transactions. This is done by the broker.i.e. Kotak Neo.

• Every sale transactions will be credited to client Banks account Net of tax. Hence for every sale transaction capital gains will be calculated by a CA. As per current laws for long term capital gains, Tax rate is nil & for short-term capital gain,tax rate is 15.45%.

An NRI can purchase up to a maximum of 5% of the aggregate paid up capital of the company (equity as well as preference capital) or the aggregate paid up value of each series of convertible debentures as the case may be. For the purpose of this ceiling, investment under the Portfolio Investment Scheme on repatriation as well as non-repatriation basis will be clubbed together.

There is an overall ceiling of 10% of paid-up equity share capital of the company/paid-up value of each series of convertible debentures for purchase by all NRIs/OCBs put together. The overall ceiling can be raised if the company concerned passes a special resolution to that effect in its general body meeting.

While limits of individual holdings by NRIs are monitored by the respective designated bank branch, RBI monitors the holding limits by NRIsin aggregate. Once the aggregate holding of NRIsbuilds up/ about to build up to the maximum prescribed ceiling, RBI puts the concerned stock under the Restrict List/Watch List which is published by RBI from time to time.

Companies have different investment ceilings depending on sectors. Once the ceiling is breached the stock is blocked by RBI for NRI trading. This scripts is re-opened for trading once the holding percentage of NRI's drops down.

Reserve Bank monitors the investment position of NRIs/FIIs in listed Indian companies, reported by designated banks, on a daily basis. When the total holdings of NRIs/FIIs under the Scheme reaches the limit of 2 percent below the sectoral cap, Reserve Bank will issue a notice (caution list) to all designated branches of designated banks cautioning that any further purchases of shares of the particular Indian company will require prior approval of the Reserve Bank. Once the shareholding by NRIs/FIIs reaches the overall ceiling / sectoral cap /statutory limit, the Reserve Bank places the company in the Ban List. Once a company is placed in the Ban List, no NRI can purchase theshares of the company under the Portfolio Investment Scheme. Listof caution/banned RBI scrip is available at http://www.rbi.org.in/scripts/BS_FiiUSer.aspx

Yes, NRI can trade in ETFs. Currently NRI cannot buy ETF from online trading portal of Kotak Neo, they need to place an order through our call Centre or their respective dealers.

Yes, generally, non-resident Indians can also invest in IPOs. Necessary details in this respect are given in the offer documents of each IPO.

When an unlisted company makes either a fresh issue of securities or offers its existing securities for sale or both for the first time to the public, it is called an IPO. This paves the way for listing and trading of the issuer's securities in the Stock Exchanges.

Initial Public offering of the following financial instruments are offered at Kotak Neo

• Equity shares

• Non-convertible debenture

• Bonds

On the basis of Pricing, an issue can be further declassified into Fixed Price issue or Book Built issue. Fixed Price Issue: When the issuer at the outset decides the issue price and mentions it in the Offer Document, it is commonly known as "Fixed price issue".

Book built Issue: When the price of an issue is discovered on the basis of demand received from the prospective investors at various price levels, it is called "Book Built issue".

The price band is a band of price within which investors can bid. The spread between the floor and the cap of the price band shall not be more than 20%. The price band can be revised. If revised, the bidding period shall be extended for a further period of three days, subject to the total bidding period not exceeding thirteen days.

A Bid-lot is the pre-determined number of shares which have to be applied for by an investor. It is different for each issue. There is a minimum lot size which is pre-decided by the company and mentioned in the application form. Eg: Minimum bid lot in IPO of XYZ co. - 10 Bid-lot Multiples of 10 Price Band - 100-120. It means that a retail investor cannot apply for less than 10 shares in that particular issue. The application for more than 10 shares has to be in multiples of 10 like 20,30,40,etc

Based on demand at various prices,the Issuer Company, in consultation with Book Runing Lead Manager (BRLMs) decides the final price of the offer. The price thus finalized is called the discovered price.

Yes, you can change or revise the quantity or price in the bid for an online order. However, you cannot modify/revise during:

Order is sent for processing Modification/ Revision / Cancellation are not allowed post cut-off time.

Yes, you can cancel your bid for online order anytime before Modification/ Revision / Cancellation cut-off time.

A Syndicate Member/Broker is a member of the Stock Exchange to whom the investor has to submit the IPO Bid/Application form. The Syndicate Member / Broker receives the bid and uploads the same on the electronic book of the stock exchange. Bids which are not uploaded into the electronic book are not considered for the purpose of allotment. The Syndicate Member/Broker , then submits the bid with the cheque to the bankers. In case of online application, the Syndicate Member/Broker generates the electronic application form and submits the same to the registrar with a proof of having paid the bid amount.

The syndicate member returns the counterfoil with the signature, date and stamp of the syndicate member. You can retain this as a sufficient proof that the bids have been accepted by the trading / syndicate member for uploading on the terminal.

Investors are broadly classified under following categories:

• Retail individual Investor (RIIs) - "Retail individual investor" means an investor who applies or bids for securities for a value of not more than Rs. 2,00,000.

• Non Institutional Investors (NIIs) -"Non Institutional Investors" i.e. individuals/corporate,means an investor who applies or bids for securities for a value of more than Rs. 2,00,000.

• Qualified Institutional Buyers (QIBs)

Only Retail IPO bids can be accepted at Kotak Neo As per SEBI circular a Non-retail bid has to placed through ASBA (Application Supported by Blocked Amount) mode with the registered SCSBs.

You can approach the compliance officer of the issuer or SEBI, whose name and contact number is mentioned on the cover page of the Company's prospectus. If you are a Kotak Neo customer, you can also contact our customer service team at 30305757 or write to us at service@kotakneo.com for your IPO related queries.

As per current norms, the newly issued share has to be listed on or before the 12th working day after the issue is closed. Working backwards, this would generally mean that the allotment process and uploading of the shares, sending of refunds etc. have to be completed within 10 working days from the date of closure of the issue.

As per current norms, the newly issued share has to be listed on or before the 12th working day after the issue is closed. Working backwards, this would generally mean that the allotment process and uploading of the shares, sending of refunds etc. have to be completed within 10 working days from the date of closure of the issue.

You can trade in new shares after they are listed or after ensuring that the allotted shares have been credited into your Demat Account. As per current rules, you cannot effect any off market transfers from your account till the shares are listed.

IPO comprises of an offer for subscription made by such company whose shares are not listed on any stock exchange for trading, whereas an FPO is offer made by already listed company to issue additional securities. For an already listed company, the investor may decide to buy from the market or subscribe to the offer made by the Company.

A retail investor can bid at any price within the price band or can bid at cut-off. "Cut-off price" means the investor is ready to pay whatever price is decided by the company at the end of the book building process. While making the application at Cut off, the investor is required to pay the amount at the highest price band. The excess amount, in case the price discovered is lower, is refunded. Cut-off option can be exercised only by Retail Investors and Employees of the issuing company applying in the Employee Category.

The Depository Participant(DP-ID) + Client ID, is the definitive identification of the applicant. Demat account fed into electronic bid file, is used to credit shares as well as remit refund. The Registrar is required to process an application based on bid file and in absence of any other possible validation, a wrong but valid demat account can lead to a wrong refund / credit of shares. Thus it is very important that the Demat Account Number is stated correctly in the application form.

As per SEBI guidelines, all applicants are required to provide their PAN while applying for an Issue. Application without PAN or with invalid PAN is rejected. Investors are requested to ensure that their DP account is updated with proper PAN details.

A Registrar to an Issue is a SEBI-registered entity, qualified to act as such, and who electronically processes all the applications and carries out the allotment process, as per the rules/prospectus. The Registrar is responsible for complying with the time deadlines of updating the electronic credit of shares to the successful applicants, dispatching/uploading of refunds and attending to all investor related queries after the issue is completed. Usually, the Registrar continues to work with the company, even after the IPO, as its Registrar and Transfer Agent.

The Registrar's role in an IPO can be divided into three phases:

Pre-IPO, when the Registrar completes all preparatory work for the IPO, including instructing the escrow / ASBA bankers about the procedures they have to follow and the timelines to which they have to adhere.

Post IPO closure but pre Listing,during this time the Registrar receives the Final BID file from the exchanges, validates the same, coordinates with the bankers to ensure that final collection certificates are received, all cheque returned cases are accounted, and withdrawals if any are taken note of . The Registrar identifies all other technical defects. The Registrar after considering all the rejects, withdrawals etc., and after reconciling the bank receipts, with the Final Bid file, prepares the basis of allotment in conjunction with the BRLMs and Issuer , and submits this basis for approval to the Stock Exchange. Upon approval by the Stock Exchange, the Registrar proceeds with the allotment of shares, ensures that the electronic files for credit of shares and refunds are properly prepared and ensures the completion of all these processes including over printing / dispatch of allotment advices/ refunds are within the prescribed time limits.

Post allotment / listing phase, during this time the Registrar attends to all the complaints and strives for speedy resolution of the same.

The status of bidding in a book built issue is available on the website of BSE/NSE on a consolidated basis. The data regarding bids is also available investor category wise. After the price has been determined on the basis of bidding, the public advertisement containing, inter alia, the price as well as a table showing the number of securities and the amount payable by an investor, based on the price determined, is issued. However, in case of a fixed price issue, information is available only after the closure of the issue through a public advertisement, issued within 10 days of dispatch of the certificates of allotment/ refund orders.

Funds should be transferred to your Mutual funds / IPO ledger account vide money transfer link at www.kotakneo.com. You can transfer funds from below mentioned sources:

• Bank

• Equity *

• NRI clients can transfer funds from Saving bank to Mutual funds ledger and vice versa

• You need to have online trading account with Kotak Neo.

-Your demat account should be linked to your Kotak Neo.com trading account.

• There should be sufficient funds in your Mutual funds/IPO ledger account held with Kotak Neo

You can check the allotment of shares in your Demat account linked to your Kotak Neo online trading account on date of IPO order.

A Mutual fund is a mechanism for pooling resources by issuing units to the investors and investing funds in securities, in accordance with objectives as disclosed in the offer document. Mutual fund units are issued to the investors in accordance with a quantum of money invested by them. Investors of mutual funds are known as unit holders. Investments in securities are spread across a wide spectrum of industries and sectors and thereby reduce the risk involved through diversification. The profits or losses are shared by the investors in proportion to their investments. The mutual funds normally come out with a number of schemes with different investment objectives which are launched from time to time. A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

Asset Management Company (AMC) is a company that invests its clients' pooled fund into securities that matches its declared financial objectives. Asset management companies provide investors with more diversification and investing options than they would have by themselves.

The Net Asset Value is the cumulative market value of the securities held by the scheme. Since market value of securities changes every day, NAV of a scheme also varies on day to day basis. The NAV per unit is the market value of securities of a scheme divided by the total number of units of the scheme on any particular date. For example, if the market value of securities of a mutual fund scheme is Rs 200 lakhs and the mutual fund has issued 10 lakhs units of Rs. 10 each to the investors, then the NAV per unit of the fund is Rs.20. NAV is required to be disclosed by the mutual funds on a regular basis - daily or weekly - depending on the type of scheme."

Qualified and experienced professionals manage Mutual Funds. Generally, investors, by themselves, may have reasonable capability, but to assess a financial instrument, a professional analytical approach is required in addition to access to research and information, time and methodology to make sound investment decisions.

Since Mutual Funds make investments in a number of stocks, the resultant diversification reduces risk. They provide the small investors with an opportunity to invest in a larger basket of securities.

The investor is spared the time and effort of tracking investments, collecting income, etc. from various issuers, etc.

It is possible to invest in small amounts as and when the investor has surplus funds to invest.

Mutual Funds are well regulated & governed by SEBI (Mutual Funds) Regulations, 1996 thereby ensuring transparency of investments.

In case of open-ended funds, the investment is very liquid as it can be redeemed at any time with the fund, unlike direct investment in stocks/bonds.

Mutual Funds unlike fixed deposit, Bonds and other Government securities do not provide guarantee of returns. Their returns are directly related to the performance of the underlying asset in which they invest like shares, debentures etc which are known for the risk associated with them. The unit value may vary with the performance of the company, and companies may default in payment of interest/principal on their debentures/bonds/deposits. In addition to these, changes in macro level policies & regulations may also affect sectors in Indian economy thereby affecting mutual fund performance.

Schemes according to Maturity Period

Open-ended Fund/ Scheme

An open-ended fund or scheme is one that is available for subscription and repurchase on a continuous basis. These schemes do not have a fixed maturity period. Investors can conveniently buy and sell units at Net Asset Value (NAV) related prices which are declared on a daily basis. The key feature of open-end schemes is liquidity.

Close-ended Fund/ Scheme

A close-ended fund or scheme has a stipulated maturity period e.g. 5-7 years. The fund is open for subscription only during a specified period at the time of launch of the scheme. Investors can invest in the scheme at the time of the initial public issue and thereafter they can buy or sell the units of the scheme on the stock exchanges where the units are listed. In order to provide an exit route to the investors, some close-ended funds give an option of selling back the units to the mutual fund through periodic repurchase at NAV related prices. SEBI Regulations stipulate that at least one of the two exit routes is provided to the investor i.e. either repurchase facility or through listing on stock exchanges. These mutual funds schemes disclose NAV generally on weekly basis.

Interval Funds / Scheme

These funds combine the features of both open-ended and close-ended funds wherein the fund is close-ended for the first couple of years and open-ended thereafter. Some funds allow fresh subscriptions and redemption at fixed times every year (say every six months) in order to reduce the administrative aspects of daily entry or exit, yet providing reasonable liquidity

Schemes according to Investment Objective

Growth / Equity Funds

The aim of growth funds is to provide capital appreciation over medium to long- term periods. Such schemes normally invest a major part of their corpus in equities. Such funds have comparatively high risks. These schemes provide different options to the investors like dividend option, capital appreciation, etc. and the investors may choose an option depending on their preferences. The investors must indicate the option in the application form. The mutual funds also allow the investors to change the options at a later date. Growth schemes are good for investors having a long-term outlook seeking appreciation over a period of time.

Income / Debt Funds

The aim of income funds is to provide regular and steady income to investors. Such schemes generally invest in fixed income securities such as bonds, corporate debentures, Government securities and money market instruments. Such funds are less risky compared to equity schemes. These funds are not affected because of fluctuations in equity markets. However, opportunities of capital appreciation are also limited in such funds. The NAVs of such funds are affected because of change in interest rates in the country. If the interest rates fall, NAVs of such funds are likely to increase in the short run and vice versa. However, long term investors may not bother about these fluctuations.

Balanced Fund

The aim of balanced funds is to provide both growth and regular income. As such, schemes invest both in equities and fixed income securities in the proportion indicated in their offer documents. These are appropriate for investors looking for moderate growth. They generally invest 40-60% in equity and debt instruments. These funds are also affected because of fluctuations in share prices in the stock markets. However, NAVs of such funds are likely to be less volatile compared to pure equity funds.

Money Market or Liquid Fund

These funds are also income funds and their aim is to provide easy liquidity, preservation of capital and moderate income. These schemes invest exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc. Returns on these schemes fluctuate much less as compared to other funds. These funds are appropriate for corporate and individual investors as a means to park their surplus funds for short periods.

Gilt Fund

These funds invest exclusively in government securities. Government securities have no default risk. NAVs of these schemes also fluctuate due to change in interest rates and other economic factors as in the case with income or debt oriented schemes.

Index Funds

Index Funds replicate the portfolio of a particular index such as the BSE Sensitive index, S&P NSE 50 index (Nifty), etc. These schemes invest in the securities in the same weightage comprising of an index. NAVs of such schemes would rise or fall in accordance with the rise or fall in the index, though not exactly by the same percentage due to some factors known in technical terms as a "tracking error". Necessary disclosures in this regard are made in the offer document of the mutual fund scheme.

Mutual funds cannot increase the load beyond the level mentioned in the offer document. Any change in the load will be applicable only to prospective investments and not to the original investments. In case of imposition of fresh loads or increase in existing loads, the mutual funds are required to amend their offer documents so that the new investors are aware of loads at the time of investments.

• Birla Sun life Mutual fund
• Deutsche Mutual fund
• DSP Blackrock Mutual fund
• Fidelity Mutual fund
• FORTIS Mutual fund
• Franklin Templeton Mutual fund
• HDFC Mutual fund
• HSBC Mutual fund
• ICICI Prudential Mutual fund
• IDBI Principle Mutual fund
• IDFC Mutual fund
• ING Vysya Mutual fund
• JM Mutual fund
• Kotak Mahindra Mutual fund
• L&T Mutual fund
• LIC Mutual fund
• Reliance Mutual fund
• Religare Mutual Fund
• SBI Mutual fund
• Sundaram BNP Paribas Mutual fund
• Tata Mutual fund

Mutual funds transaction types are bifurcated in two categories i.e. Commercial transaction and Non-commercial transactions.

Commercial transactions offered at kotakneo.com are following:

• Purchase / Additional Purchase
• Redemption
• Switch
• Systematic Investment Plan
• Systematic Transfer Plan

Non-Commercial transactions offered at kotakneo.com are following: Such transactions comprises of the requests for change in client's profile in AMC records for instance:

• Offline to Online portfolio conversion
• Nomination Request
• Bank updation

Some schemes like ETFs are compulsorily allotted in demat mode. Hence to transact in such a scheme you need to have a Demat a/c linked to your trading account.

For allotment in online mode there is no need for a Demat account.

As per recent developments in the industry, units of all mutual funds schemes can be allotted in both the modes i.e. Physical as well as in Demat. Also, the depositories have allowed the DPs to facilitate holding of mutual funds in demat account. Currently Kotak Neo.com facilitates the transaction of online mode of allotment only.

• Ease of tracking status & periodical variations in mutual funds

• Efficient & Speedy

• Avoid issuing of cheques & paper work every time you invest

• Ensures privacy of your investments Invest at your convenience through call & trade.

Buy- Choose from over 3000 schemes representing more than 21 AMCs for the purchase of mutual funds units. Track- You can view your transaction status in addition to portfolio monitoring & monthly MIS on your mutual funds portfolio.

Redeem- You can redeem your mutual fund units anytime & exit/reinvest as the case may be.

Transfer- www.kotakneo.com enables you to transfer the funds directly from your bank account to MF ledger & also receive mutual funds proceeds directly into your bank account.

SIP- Enjoy the benefit of investing in SIPs by receiving regular updates on your SIP installments, due dates & value-added features every now & then.

Kotak Neo as a distributor does not levy any charges or fees for the investments in any mutual funds schemes online.

Yes, non-resident Indians can also invest in mutual funds. Necessary details in this respect are given in the offer documents of the schemes.

NRIs can invest in Mutual funds through both NRE and NRO route. Funds invested through NRE are easily repatriable.

An abridged offer document, which contains very useful information, is required to be given to the prospective investor by the mutual fund. The application form for subscription to a scheme is an integral part of the offer document. SEBI has prescribed minimum disclosures in the offer document. An investor, before investing in a scheme, should carefully read the offer document. Due care must be given to portions relating to main features of the scheme, risk factors, initial issue expenses and recurring expenses to be charged to the scheme, entry or exit loads, sponsor's track record, educational qualification and work experience of key personnel including fund managers, performance of other schemes launched by the mutual fund in the past, pending litigations and penalties imposed, etc.

Mutual funds are required to dispatch certificates or statements of accounts within six weeks from the date of closure of the initial subscription of the scheme. In case of close-ended schemes, the investors would get either a demat account statement or unit certificates as these are traded in the stock exchanges. In case of open-ended schemes, a statement of account is issued by the mutual fund within 30 days from the date of closure of initial public offer of the scheme. The procedure of repurchase is mentioned in the offer document.

A mutual fund is required to dispatch to the unit holders the dividend warrants within 30 days of the declaration of the dividend and the redemption or repurchase proceeds within 10 working days from the date of redemption or repurchase request made by the unit holder.

You can view mutual funds portfolio tracker available in the mutual funds section of www.kotakneo.com. It displays cost of your holding, the current value of holding, realised gain/loss, unrealised gain/loss, IRR (Internal rate of returns), etc.

In case of winding up of a scheme, the mutual funds pay a sum based on prevailing NAV after adjustment of expenses. Unit holders are entitled to receive a report on winding up from the mutual funds which gives all the necessary details.

Being an NRI, mutual fund units can only be bought in NON-PINS account.

Yes. The tax applicable is called as STT i.e. Security transaction tax which is 0.25%. STT is applicable only in case of redemption of equity linked schemes. Normal tax rates apply in case of Debt Mutual funds. In case of NRI's Tax is deducted at source by the AMC.

Switch means an option to the customer to switch all or part of their investments in a scheme/plan/option of the fund to another scheme/plan/option of the same fund which is available for investment at that time, subject to the terms and conditions of the offer document of the respective schemes. The switch will be made by redeeming existing units and re investing the redemption proceeds in another scheme/plan/option at the applicable redemption price and purchase price respectively for the scheme(s)/, plan(s)/, option(s).

Systematic Investment Plan (SIP) means an option available with the Customer for investing, at a specified frequency, in a specified Scheme of the Fund, a fixed amount of Rupees for purchasing additional units at the applicable NAV on a specified date, assuming that the provisions of the Offer document of the respective scheme shall always be applicable for SIP transactions.

Systematic Transfer Plan (STP) means an option available with the customer who holds Units to transfer a pre determined amount or a variable amount subject to deduction of tax, if any, at a specified frequency, from a specified Scheme of the fund to another specific scheme of the fund at a specified period at a specified frequency at the applicable NAV on a specified date, assuming that the provisions of the offer document of the respective Schemes shall always be applicable for STP transactions.

Auto-Debit feature enables automatic transfer of funds from your Kotak Mahindra Bank Account to MF Ledger before the due date of SIP & ensures timely investment in mutual fund SIPs with no defaults.

No. Prior to the implementation of the SEBI guideline, an entry load was charged on all Mutual fund purchases. As per the new guidelines issued by SEBI, with effect from August 1, 2009, entry load will not be charged on purchases in existing mutual fund schemes or on schemes launched thereafter. However, any investment made by you in an NFO which was launched prior to August 1, 2009 will continue to attract entry load and other charges as specified in the offer document.

Exit load is not a standard charge; it varies from scheme to scheme depending upon the type & objective of the scheme. Exit load is calculated as a percentage of NAV & normally varies between 0.25% to 2% of the redemption value. The funds which do not charge exit loads are known as 'No Load Funds' .

Redemption price is the price received on selling units of open-ended scheme. If the fund does not levy an exit load, the redemption price will be same as the NAV. The redemption price will be lower than the NAV in case the fund levies an exit load.

Repurchase price is the price at which a close-ended scheme repurchases its units. If the fund does not levy an exit load, the repurchase price will be same as the NAV. The repurchase price will be lower than the NAV in case the fund levies an exit load.

It can be done by placing an online request through www.kotakneo.com > Mutual Funds > Offline to Online.

Yes.