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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 restriction on an AMC of a mutual fund under SEBI regulations?

An AMC cannot act as a trustee of any mutual fund. This keeps the managing function separate from the supervising function, so trustees can independently oversee the AMC. The AMC can still run several schemes and charge fees within prescribed limits.

  1. AIt cannot act as a trustee of any other mutual fundCorrect
  2. BIt cannot manage more than one scheme
  3. CIt cannot charge any fee for managing schemes
  4. DIt cannot appoint a custodian

Explanation

An AMC cannot act as a trustee of any mutual fund, keeping management and supervision separate. An AMC may manage multiple schemes and charges management fees within expense limits, and a custodian is appointed by the trustees under regulations.

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