Skip to content

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

As per SEBI rules, when a mutual fund scheme's investment objective or fundamental attributes are changed, what must the AMC provide to existing unit holders?

Unit holders must be informed in writing before a change in fundamental attributes and given an exit option at the prevailing NAV without exit load. A mere newspaper notice, bonus units or an expense refund is not what the rules require.

  1. AAn exit option at the prevailing NAV without exit load, after written notice to unit holdersCorrect
  2. BOnly a newspaper notice, with no exit option
  3. CA bonus unit allotment of 5% of holdings
  4. DA refund of all expenses charged in the past year

Explanation

A change in fundamental attributes requires prior written communication to unit holders and an exit window at the prevailing NAV free of exit load. Newspaper notice alone is not enough, and bonus units or expense refunds are not mandated.

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