NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Legal Structure of Mutual Funds in India
In the three-tier structure of a mutual fund in India, which entity holds the trust property for the benefit of the unit holders?
The trustees hold the mutual fund's property in trust for the benefit of unit holders. The sponsor merely settles the trust and the AMC manages the schemes, while the RTA handles transactions and records. Trustees also supervise the AMC on behalf of investors.
- AThe Sponsor
- BThe TrusteesCorrect
- CThe Asset Management Company
- DThe Registrar and Transfer Agent
Explanation
A mutual fund in India is set up as a trust. The trustees hold the property of the mutual fund for the benefit of unit holders and oversee the AMC. The sponsor only establishes the fund, and the AMC manages the investments. The RTA only provides unit-related services.
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