Skip to content

NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Legal and Regulatory Framework

A mutual fund scheme wants to change its fundamental attributes, such as converting a close-ended scheme into an open-ended one. Which of the following must be done as per SEBI regulations before the change is implemented?

Unitholders must be informed through written communication and a newspaper advertisement, and must get an exit option of at least 30 days at the prevailing NAV without exit load. Trustee approval alone or a website notice does not satisfy the regulations.

  1. AOnly a notice on the AMC website is needed
  2. BThe trustees may approve it without informing unitholders
  3. CUnitholders must be informed by written communication and an advertisement, and be given an exit option at the prevailing NAV without exit load for at least 30 daysCorrect
  4. DSEBI will implement the change after a one-time AMFI circular is issued

Explanation

For a change in fundamental attributes, trustees must obtain SEBI approval, inform unitholders through written communication and newspaper advertisement, and provide an exit window of at least 30 days at the prevailing NAV without exit load. A website notice or trustee approval alone is inadequate.

Did you get it right without looking?

One question tells you little. A timed set on Legal and Regulatory Framework shows your real accuracy, how long you take and where you lose marks.

Practise Legal and Regulatory FrameworkFree diagnostic mock

More Legal and Regulatory Framework questions