NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Legal and Regulatory Framework
Under the SEBI (Mutual Funds) Regulations, which entity is required to hold the assets of a mutual fund scheme in custody on behalf of unit holders?
The trustee holds the scheme assets for unit holders, and the securities are kept with a custodian appointed by the trustee. The AMC only manages investments, and the RTA only maintains unit holder records, so neither is the entity holding the assets.
- AThe sponsor
- BThe asset management company
- CThe trustee, through a custodian appointed for the securitiesCorrect
- DThe registrar and transfer agent
Explanation
Trustees hold the scheme property in trust for unit holders. Securities are physically or electronically held by a custodian appointed by the trustee. The AMC manages investments but does not hold the assets, and the RTA only maintains unit records.
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