Investment funds and securities

Classify the business before accepting clients

Identify whether the activity is pooled investment management, individual portfolio management, investment advice, research, distribution, brokerage or a supporting technology service. Map the actual customer relationship, decision-making authority and handling of assets. A company registration or a general consultancy contract does not establish permission for a regulated securities activity.

SEBI maintains separate regulations for these activities. Select the current framework and applicable circulars for the entity and product; do not transfer an AIF checklist to an advisory or brokerage business.

Separate the fund from its service providers

For a fund structure, identify the fund, manager, sponsor, trustee where relevant, custodian, administrator and other appointed providers. Record who makes decisions, holds records, calculates figures and communicates with investors. Keep each entity’s books and contractual obligations distinct.

For an advisory or distribution model, document remuneration, scope, conflicts and customer communications against the applicable requirements. Avoid implying that an unrelated registration endorses a product or guarantees performance.

Create an investor and transaction evidence trail

• Constitutional and offering documents, executed agreements and approved versions.
• Investor onboarding, commitments, contributions, allocations and distributions.
• Investment approvals, transaction documentation and custody reconciliations.
• Valuation inputs, fee calculations, expense allocation and supporting approvals.
• Investor communications, complaints, conflicts and corrective actions.

Keep financial reporting reproducible

Reconcile bank, investment and investor records before producing statements. Explain differences between committed capital, cash received and invested amounts. Record the basis of valuation and management estimates, and retain the inputs needed for an independent review.

Review tax and withholding treatment for the actual entity, investor and transaction rather than assuming every fund has the same treatment. Overseas investors or investments introduce separate foreign-exchange and reporting questions.

Example: allocating shared expenses

A manager operates two schemes and incurs a common service cost. It should apply the documented allocation basis, check consistency with the governing documents and retain approval evidence. Charging whichever scheme has cash available makes neither the allocation nor investor reporting reliable.

Agree the professional boundary

Kosha can support entity accounts, reconciliations, corporate records and document coordination. Investment recommendations, regulated management, custody, statutory valuation and assurance remain within their separately authorised professional scope. We do not promise investment returns or regulatory approvals.

Prepare the entity accounting handover

For bookkeeping and monthly-close support, specify which entity and reporting period the assignment covers. Provide its ledger, bank reconciliation, invoices and the approved schedules supplied by the responsible administrator or other appointed provider. Identify the owner and version of each input.

Keep changes after the reporting cut-off traceable. If a provider revises a fee schedule, retain the earlier version, the reason for the revision and the resulting accounting adjustment. This lets the team explain a changed figure without replacing the historical record silently.

List unresolved inputs separately, including balances awaiting confirmation and allocations awaiting an authorised decision. Agree who resolves each item before the figures are used in the relevant report. Administrative reconciliation does not establish a valuation or replace the responsibilities of the fund’s appointed professionals.