Registered Collective Investment Management Company
What happened
A Collective Investment Management Company (CIMC) is an entity registered with SEBI under the Collective Investment Schemes (CIS) Regulations, 1999, to manage pooled investment schemes outside mutual funds. It must be incorporated as a company under the Companies Act, maintain a minimum net worth of Rs. 5 crore, and obtain a certificate of registration from SEBI. CIMCs manage schemes where corpus is raised from investors and invested in projects, typically real estate or plantation schemes.
Why it matters
Collective Investment Schemes emerged as a regulatory response to large-scale investor frauds in the 1990s — particularly plantation and agro-based schemes that raised thousands of crores without regulatory oversight. SEBI was empowered under Section 11AA of the SEBI Act, 1992, to define and regulate CIS. Any pooled investment arrangement that is not a mutual fund, pension fund, insurance product, or a scheme offered by a NBFC registered with RBI, yet raises money from more than 50 persons exceeding Rs. 100 crore, falls under CIS jurisdiction.
The entity managing such a scheme must register as a Collective Investment Management Company (CIMC) under the CIS Regulations, 1999. The CIMC structure mirrors mutual fund governance — it requires a trustee company, a separate custodian, and a compliance officer. The CIMC itself cannot act as trustee. Schemes must be close-ended and units must be listed on recognised stock exchanges.
In practice, very few entities have obtained valid CIMC registration, making this a high-enforcement area. SEBI has taken action against hundreds of unregistered CIS operators, including winding-up orders and attachment of assets. The SAT and Supreme Court have consistently upheld SEBI's broad interpretation of 'collective investment scheme' under Section 11AA. For SEBI Grade A aspirants, this topic sits at the intersection of registration norms, investor protection, and enforcement powers.
The entity managing such a scheme must register as a Collective Investment Management Company (CIMC) under the CIS Regulations, 1999. The CIMC structure mirrors mutual fund governance — it requires a trustee company, a separate custodian, and a compliance officer. The CIMC itself cannot act as trustee. Schemes must be close-ended and units must be listed on recognised stock exchanges.
In practice, very few entities have obtained valid CIMC registration, making this a high-enforcement area. SEBI has taken action against hundreds of unregistered CIS operators, including winding-up orders and attachment of assets. The SAT and Supreme Court have consistently upheld SEBI's broad interpretation of 'collective investment scheme' under Section 11AA. For SEBI Grade A aspirants, this topic sits at the intersection of registration norms, investor protection, and enforcement powers.
🔒
Key figure and date from this topic
Specific number or threshold to remember
Policy or regulatory implication