Quick Revision – Chapter 2 Crash Course

1. Permission from SEBI is required for appointment of Bankers or the Stock Brokers as the distributors of Mutual Fund Schemes:

2. The Custodian of a Mutual Fund is responsible for Acceptance and delivery of securities for the purposes of sale/purchase transactions of various schemes of the Fund:

3. Mutual Funds are Governed as per the provisions of Indian Trusts Act since they are constituted as Trusts.

4. Maintaining the records of Mutual Fund Scheme investors is the responsibility of a

5. Essential Feature of a Mutual Fund is that it can sell units under one scheme only.

6. AMC can maintain the record of unit holders itself if it does not appoint a Registrar & Transfer Agent (RTA) to do so.

7. Trustee of one Mutual Fund is also eligible to become trustee of any other mutual fund. 

8. A minimum of ______of the directors on the Board of AMC should be independent directors i.e. not associated with sponsor or its subsidiaries or trustees :

9. A Mutual Fund can be constituted only as a Trust.

10. A _______________is not appointed by the Asset Management Company (AMC)

11. Implementation of Uniform KYC is the responsibility of the Depository participants.

12. Either Individuals could be appointed as trustees or a Trustee Company may be appointed.

13. To be eligible, sponsor should possess a good track record and reputation in the business of financial services for a minimum period of _____ years. They should have a positive net worth in all immediately preceding ______ years.

14. No change will be allowed in the fundamentals of scheme or any other change which may compromise the interest of investors unless communication is done with investors and an option is given to them for exit at NAV without any exit load.

15. The auditor appointed for audit of fund scheme will need to be different from the auditor of AMC.

16. As defined in the SEBI (Mutual Funds) Regulation Act, 1996, a mutual fund is to be constituted as a:

17. The Beneficiary of a Mutual Fund Trust are:

18. An Investment Management Agreement is to be executed between:

19. The auditor appointed to audit the scheme accounts has to be the same as the auditor of the AMC accounts.

20. Trustees of a Mutual Fund Trust are responsible for protecting the interest of:

21. Indian Mutual Funds are allowed to invest in Real Estate Assets.

22. Anybody holding 40% or more of the net worth of AMC is considered to be a __________ and hence required to comply with the qualification criteria:

23. In a Mutual Fund, The sponsors need to appoint at least ____Trustees or can appoint a Trustee Company with at least ____Directors on its Board.

24. Custodian monitors and tracks corporate actions like dividend, Bonus and Rights issues of companies where the scheme has invested.

25. A mutual Fund scheme can be formed to invest in Gold or Gold related instruments.

26. For formation of a Mutual Fund Trust, a Trust Deed is to be executed between the:

27. It is mandatory for an Asset Management Company to appoint a Registrar & Transfer Agent (RTA) to maintain the record of Unit Holders.

28. An Asset Management Company is to be appointed by

29. A Custodian is responsible for :

30. Trustees are responsible to ensure all transaction entered into by AMC are in line with ___________________ and are compliant with related regulations.

31. The Stock Exchanges which provide facilities for Mutual Fund trading also do the functions of Mutual Fund RTAs. True or False?

32. Scheme auditor is appointed by Trustees, AMC auditor is appointed by AMC.

33. In the secondary market, sale/purchase investment transaction of securities by AMC are executed by the Securities Dealers of AMC.

34. Is it necessary to take prior approval of SEBI before a person is appointed as trustee?

35. What should be the minimum contribution of a sponsor in an AMC

36. What minimum net worth is required for a new AMC?

37. Payment aggregators like Bill Desk etc. are the service providers who facilitate ___________ processing.

38. AMCs may also provide management and advisory services to the regulated Foreign portfolio Investors (FPIs) falling under the specified categories.

39. All AMCs are required to have an appropriate policy and system in place to conduct an in-house credit risk assessment/Due diligence of debt and money market instruments before investing in such instruments.