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CS Executive · Capital Market and Securities Laws · Mutual Funds

Ananya Mutual Fund's asset management company (AMC) fails to comply with the SEBI regulations that restrict the activities of asset management companies. Under the SEBI Act, 1992, which section provides the penalty for this failure?

Section 15E of the SEBI Act, 1992 provides the penalty when an asset management company of a registered mutual fund fails to comply with regulations restricting its activities. Section 15D covers other mutual fund defaults, such as registration, listing and investment failures, so it is not the provision for AMC activity restrictions.

  1. ASection 15ECorrect
  2. BSection 15D
  3. CSection 15EA
  4. DSection 11AA

Explanation

Section 15E applies where an AMC of a registered mutual fund fails to comply with regulations restricting AMC activities. Section 15D deals with defaults by the mutual fund or collective investment scheme itself, such as non-registration, non-listing or failure to invest money as specified. Section 15EA covers AIFs, InvITs and REITs, and Section 11AA defines a collective investment scheme.

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