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 is the legal owner of the assets of the mutual fund schemes, holding them for the benefit of unitholders?
The Trustee Company or Board of Trustees holds the assets of the mutual fund schemes. A mutual fund is constituted as a trust, and trustees hold its property in a fiduciary capacity for unitholders. The AMC manages investments, and the custodian only safekeeps securities.
- AThe Asset Management Company
- BThe Trustee Company or Board of TrusteesCorrect
- CThe Sponsor
- DThe Custodian
Explanation
The mutual fund is set up as a trust. The trustees hold the trust property in a fiduciary capacity for the benefit of unitholders. The AMC only manages the schemes, the sponsor only establishes the fund, and the custodian only safekeeps securities.
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