NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Concept and Role of a Mutual Fund
In the mutual fund structure in India, which of the following best describes the role of the custodian?
The custodian safekeeps the securities owned by mutual fund schemes and facilitates their delivery on settlement. It does not take investment decisions, which the AMC makes, nor maintain investor records, which the registrar and transfer agent handles.
- ASafekeeping of the securities held by the scheme and facilitating their deliveryCorrect
- BManaging the portfolio and taking investment decisions
- CSponsoring the trust and contributing to its corpus
- DMaintaining investor records and issuing account statements
Explanation
A custodian holds the securities and physical assets of the schemes in safe custody and handles settlement-related delivery. Investment decisions belong to the AMC, and investor records are maintained by the registrar and transfer agent.
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