ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Mutual funds in India are regulated by the Securities and Exchange Board of India (SEBI). Since running of a mutual fund involves managing of investors’ money, SEBI prescribes comprehensive set of guidelines in the functioning of a mutual fund through the “SEBI MF regulations 1996”.

Detailed explanation-2: -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.

Detailed explanation-3: -Trustee. A trustee in the case of Mutual funds is a holding service who has administrative power for managing the money, property or assets used in mutual funds. The trustee can be an individual person, member of the board of directors, a company or a bank appointed with the approval of the SECP.

Detailed explanation-4: -The trustees of the mutual fund hold its property for the benefit of the unitholders. Asset Management Company (AMC) approved by SEBI manages the funds by making investments in various types of securities. Custodian, who is registered with SEBI, holds the securities of various schemes of the fund in its custody.

Detailed explanation-5: -The fees charged by mutual funds are regulated and are subject to certain limits specified by the Securities and Exchange Board of India (SEBI).