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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Legal Structure of Mutual Funds in India

Which of the following is a requirement that an applicant must satisfy to be eligible to act as a sponsor of a mutual fund under the SEBI (Mutual Funds) Regulations?

A sponsor must have a sound track record and a general reputation of fairness and integrity in its business dealings, along with relevant financial services experience and a sound financial record. It need not be a bank, a foreign firm, or the full owner of the AMC.

  1. AIt must have a sound track record and general reputation of fairness and integrity in all its business transactionsCorrect
  2. BIt must be a public sector bank
  3. CIt must hold at least 100 percent of the net worth of the AMC
  4. DIt must be a foreign institution with a presence in at least five countries

Explanation

Sponsor eligibility includes a sound track record, a reputation for fairness and integrity, and business experience in financial services of at least five years with positive net worth and profits in the preceding years. Being a public sector bank, foreign, or owning 100 percent of the AMC is not a requirement.

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