CS Executive · Capital Market and Securities Laws · Basics of Capital Market
Sunita invests in a mutual fund scheme and wants an independent party to hold the scheme's securities and safeguard the assets of investors. Under SEBI's mutual fund framework, which participant performs this safekeeping role for the scheme's assets?
The participant is the custodian. A custodian holds the securities belonging to clients or a mutual fund scheme in safe custody and maintains related records. Registrars handle allotment work, underwriters guarantee subscription of an issue, and bankers to an issue collect application money, so none of them safeguards scheme assets.
- ACustodianCorrect
- BRegistrar to an issue
- CUnderwriter
- DBanker to an issue
Explanation
A custodian holds the securities of a scheme in safe custody and keeps records of them. A registrar to an issue deals with applications and allotment in issues, an underwriter commits to subscribe unsubscribed portions, and a banker to an issue collects application money.
Did you get it right without looking?
One question tells you little. A timed set on Basics of Capital Market shows your real accuracy, how long you take and where you lose marks.
More Basics of Capital Market questions
- Arjun Traders wants to understand the legal basis of SEBI. SEBI was first constituted as an administrative body in 1988 and later acquired s…
- Kaveri Auto Ltd, a listed company, offers new equity shares only to its existing shareholders in the ratio of 1 share for every 5 held, at a…
- Which of the following best explains why a well-developed secondary market supports the functioning of the primary market?
- Sunrise Textiles Ltd, an unlisted company, offers its shares to the general public for the first time through a prospectus to raise funds fo…
- Meera, a retail investor in Pune, wants to know which statutory body primarily regulates stock exchanges, mutual funds and other intermediar…
- Arjun's company wants to raise funds through a public issue of equity shares. Which regulator's framework, together with the Companies Act, …