NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Legal and Regulatory Framework
Which of the following statements about the trustees of a mutual fund under SEBI regulations is correct?
Trustees hold the mutual fund's property in trust for unit holders and oversee the AMC's working. They do not run daily investment decisions, which belong to the AMC, and they are not answerable only to the AMC.
- ATrustees must manage the day-to-day investment decisions of each scheme
- BTrustees hold the fund property in trust for the benefit of unit holders and oversee the AMCCorrect
- CTrustees are appointed by the AMC and report only to the AMC
- DTrustees may be the same persons as the directors of the AMC without restriction
Explanation
The trust holds the mutual fund property for unit holders, and the trustees supervise the AMC's functioning. Investment decisions belong to the AMC. Trustees are not subordinate to the AMC, and the regulations require that a majority of trustees be independent of the sponsor, and that a person not be a director of the AMC and a trustee of the same fund.
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