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CS Executive · Capital Market and Securities Laws · Mutual Funds

Meridian Mutual Fund, registered with SEBI, does not invest the money collected from a scheme in the manner or within the period specified in the regulations. Under which clause of Section 15D of the SEBI Act, 1992 is it liable?

Failure by a registered mutual fund to invest collected money in the manner or within the period specified in the regulations falls under Section 15D(f) of the SEBI Act, 1992, and attracts the per-day penalty subject to the one crore rupee maximum.

  1. AClause (a), failure to obtain registration
  2. BClause (d), failure to despatch unit certificates
  3. CClause (c), failure to apply for listing of schemes
  4. DClause (f), failure to invest money collected in the manner or period specifiedCorrect

Explanation

Clause (f) of Section 15D addresses registered schemes that fail to invest the collected money in the manner or within the period specified by regulations. Clause (a) concerns lack of registration, clause (c) listing applications, and clause (d) despatch of unit certificates. None of these describes an investment failure.

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