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 assets of the mutual fund trust for the benefit of unit holders?
The trustee holds the mutual fund's assets for the benefit of unit holders. The fund is a trust, and trustees are its legal holders and overseers. The sponsor only establishes the trust, while the AMC manages investments, so neither of them holds the trust property.
- AThe sponsor
- BThe trusteeCorrect
- CThe asset management company
- DThe registrar and transfer agent
Explanation
A mutual fund is set up as a trust. The trust property is held by the trustees (the board of trustees or a trustee company) on behalf of unit holders. The sponsor only settles the trust and the AMC manages the schemes, so those options are wrong.
Did you get it right without looking?
One question tells you little. A timed set on Legal Structure of Mutual Funds in India shows your real accuracy, how long you take and where you lose marks.
More Legal Structure of Mutual Funds in India questions
- Which statement about the sponsor of a mutual fund in India is correct under the SEBI (Mutual Funds) Regulations?
- Which of the following is a role of the custodian in a mutual fund structure?
- An AMC of a mutual fund in India has a board of directors. Which of the following is consistent with the SEBI (Mutual Funds) Regulations on …
- Under the SEBI (Mutual Funds) Regulations, which statement about the sponsor's eligibility to set up a mutual fund is correct?
- Which of the following is a condition SEBI requires for a sponsor to be eligible to set up a mutual fund in India?
- Under SEBI (Mutual Funds) Regulations, which of the following is a condition for a person to be eligible as a sponsor of a mutual fund?