The Securities and Exchange Board of India (Mutual Fund) Regulations, 1996 defines a mutual fund as a ‘a fund established in the form of a trust to raise money through the sale of units to the public or a section of the public under one or more schemes for investing in securities, including money market instruments’.

According to the above definition,, a mutual fund in India can raise resources through sale of units to the public. It can be set up in the form of a Trust under Indian Trust Act. The definition has been further extended by allowing mutual funds to diversify their activities in the following areas.:

• Portfolio Management Services
• Management of offshore funds
• Providing advice to offshore funds
• Management of pension or provident funds
• Management of venture capital funds
• Management of money market funds
• Management of real estate funds