LEGAL STRUCTURE OF MUTUAL FUNDS IN INDIA

1) What is the legal structure under which mutual funds in India need to be constituted?
a) As a corporation
b) As a trust
c) As a partnership
d) As a sole proprietorship
i) Answer: b) As a trust
2) Who are the main persons behind the mutual fund business?
a) The AMC
b) The RTA
c) The trustees
d) The sponsors
i) Answer: d) The sponsors

3) Who is responsible for protecting the interests of the investors in a mutual fund trust?
a) The AMC
b) The RTA
c) The trustees
d) The sponsors
i) Answer: c) The trustees

4) Who is responsible for the day to day management of the schemes in a mutual fund?
a) The AMC
b) The RTA
c) The trustees
d) The sponsors
i) Answer: a) The AMC

5) Who is responsible for maintaining the record of investors and their unit-holding in a
mutual fund?
a) The AMC
b) The RTA
c) The trustees
d) The sponsors
i) Answer: b) The RTA
6) What are the eligibility criteria for a sponsor of a mutual fund in India?
a) 5 years of experience in financial services and a positive net worth for the past 5 years
b) 10 years of experience in financial services and a positive net worth for the past 10
years
c) 3 years of experience in financial services and a positive net worth for the past 3 years
d) 7 years of experience in financial services and a positive net worth for the past 7 years
i) Answer: a) 5 years of experience in financial services and a positive net worth for
the past 5 years
7) Who must approve the appointment of a trustee of a mutual fund in India?
a) SEBI
b) AMFI
c) The sponsor
d) The AMC
i) Answer: a) SEBI

8) What is the minimum number of trustees that a sponsor must appoint for a mutual fund in
India?
a) 2
b) 3
c) 4
d) 5
i) Answer: c) 4

9) What is the role of the trustees of a mutual fund in India?

a) To ensure the mutual fund complies with regulations and protects the interests of unit-
holders
b) To manage the day-to-day operations of the mutual fund
c) To appoint the AMC and RTA
d) To make and manage the mutual fund's investments
i) Answer: a) To ensure the mutual fund complies with regulations and protects the
interests of unit-holders

10) Who is not eligible to be appointed as a trustee of a mutual fund in India?

a) A person convicted of any economic offence or violation of any securities law
b) An AMC or an employee of an AMC
c) A person with a history of moral turpitude
d) All of the above
i) Answer: d) All of the above