(1) The applicant for the purpose of being considered eligible for the grantof provisional registration shall satisfy the Board that—
(a) the 191 [collective investment scheme]s of the applicant are in the nature of collectiveinvestment schemes;
(b) the affairs of the applicant are not being conducted in a mannerdetrimental to the interest of existing investors;
(c) the applicant has at least 50% independent directors at thetime of making the application.
186Substituted by the SEBI (Collective Investment Schemes) (Amendment) Regulations, 2014,w.e.f. 9-1-2014.
187ibid.
188ibid.
189ibid.
190ibid.
191ibid.
Explanation :— ―Independent directors‖ shall mean directorswho are not associates of the persons operating the existingcollective investment scheme;
(d) any person, directly or indirectly connected with it has not beengranted registration by the Board under the Act.
(2) The Board for the purposes of grant of provisional registration may, interalia, inspect the 192 [collective investment scheme]s, books of account, records and documents of theapplicant.
(3) The Board shall recover from the applicant such expenses including feespaid to the auditor, appraising agency as may be incurred by it for thepurposes of inspecting the 193 [collective investment scheme]s, books of account, records anddocuments of the applicant.
(4) The Board on being satisfied that the requirements specified in sub-regulation(1) are not fulfilled may reject the application and the applicantthereupon shall wind up its existing 194 [collective investment scheme](s) in the manner specified inregulation 73.
Grant of provisional registration