Multiple choice

The legal set up of a mutual fund is in the form of a

  1. joint stock company

  2. trust

  3. partnership firm

  4. limited liability partnership
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Mutual Funds are regulated by the Securities and Exchange Board of India in India. SEBI has formed “SEBI MF Regulations 1996” to regulate functioning of Mutual Funds. Under this regulation, Mutual Funds are formed as Public Trust under “The Indian Trust Act, 1882”. The trust is created through a document called the trust deed which is executed by the fund sponsor in favour of the trustees. Trustees manage the trust and are responsible to the investors in the Mutual Funds.

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