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

A mutual fund scheme's NFO document is being prepared. Which statement best reflects the SEBI requirement regarding the Scheme Information Document (SID) and its updates?

Changes in a scheme's fundamental attributes require the SEBI-prescribed procedure, including written notice to unit holders and an exit option at the prevailing NAV without exit load. The AMC cannot change them unilaterally, and AMFI does not approve such changes.

  1. AThe SID must be updated and filed with SEBI, and changes in fundamental attributes require the prescribed notice and an exit option to unit holdersCorrect
  2. BFundamental attributes can be changed by the AMC at any time without informing unit holders
  3. COnly the Key Information Memorandum requires unit holder consent for changes
  4. DFundamental attribute changes need approval only from AMFI

Explanation

A change in fundamental attributes requires prior communication to unit holders and an exit option at the prevailing NAV without exit load, along with SEBI-prescribed procedure. The AMC cannot change them unilaterally, and AMFI has no approving authority here.

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