BANKING AFFAIRS

Detailed explanation-1: -As far as mutual funds are concerned, SEBI formulates policies, regulates and supervises mutual funds to protect the interest of the investors. SEBI notified regulations for mutual funds in 1993. Thereafter, mutual funds sponsored by private sector entities were allowed to enter the capital market.

Detailed explanation-2: -A mutual fund is required to be registered with Securities and Exchange Board of India (SEBI) which regulates securities markets before it can collect funds from the public.

Detailed explanation-3: -SEBI in India is the policymaker that regulates the mutual fund industry. The SEBI guidelines for mutual funds protect the investor’s interest. These guidelines help investors to make more stabilised and informed investment decisions. SEBI regulates and promotes the securities of the Indian market.

Detailed explanation-4: -7 (c) of the Regulations, any person who holds 40% or more of the net worth of an asset management company shall be deemed to be a sponsor and will be required to apply in Form A. While applying, please ensure that the main objects of the memorandum of the sponsor company permit it to carry on mutual fund activities.

Detailed explanation-5: -SEBI issued new rules for the liquidation of mutual fund schemes in January 2022. Mutual fund trustees will be required by the new rules to obtain unitholder consent when the majority of trustees decide to close a scheme or prematurely redeem the units of a closed-ended scheme.