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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Legal and Regulatory Framework

Under the SEBI (Mutual Funds) Regulations, which entity is responsible for ensuring that a mutual fund scheme's assets are held in safe custody and for overseeing the sponsor's and AMC's compliance on behalf of unit holders?

The trustees of the mutual fund are responsible. They hold the scheme property in trust for unit holders and supervise the asset management company's compliance with SEBI rules, protecting investors' interests. Registrars only maintain records, and AMFI is an industry association without this fiduciary role.

  1. AThe trustees of the mutual fundCorrect
  2. BThe registrar and transfer agent
  3. CThe AMFI board
  4. DThe stock exchange where units are listed

Explanation

Trustees hold the scheme property in trust for unit holders and oversee the AMC's compliance with regulations. The custodian physically holds securities, but the supervisory duty for unit holders' interest rests with the trustees. An RTA only handles unit records and transactions, and AMFI is an industry body.

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