Custodian, RTA and other mutual fund constituents

Q: Custody of a scheme's securities is held by the custodian, who is appointed by:

The trustees. Guarding your assets is a trustee responsibility, so the trustees appoint the custodian.

Q: Who maintains investor records and processes purchases and redemptions?

The registrar and transfer agent (RTA). The RTA. In practice, names like CAMS and KFintech.

Q: The RTA is appointed by:

The AMC. The RTA is an operating function, so the AMC appoints it.

Q: AMFI is best described as:

The industry body for mutual funds. AMFI is the industry association. SEBI is the regulator. Do not swap them.

Q: To sell mutual funds, a distributor must hold:

An ARN from AMFI. An ARN, the AMFI Registration Number, earned after clearing this very exam.

Q: Who computes a scheme's daily NAV?

The fund accountant. The fund accounting function, arranged by the AMC, computes the NAV.

Custodian, RTA and the rest

The supporting cast, and who appoints whom

This is where marks leak, because the exam loves asking who appoints whom. One rule saves you: guarding roles are trustee appointments, operating roles are AMC appointments.

Roles and appointments follow the SEBI (Mutual Funds) Regulations, 1996, as amended. Education for the NISM Series V-A exam, not financial advice.

1
The custodian holds the scheme's securities in safe keeping. The trustees appoint the custodian.
2
The registrar and transfer agent (RTA) keeps investor records and processes transactions. The AMC appoints the RTA.
3
Two auditors exist: the scheme's auditor (appointed by the trustees) and the AMC's own auditor (appointed by the AMC).
4
The fund accountant computes the daily NAV. A distributor brings investors and needs an ARN from AMFI.
5
AMFI is the industry body for mutual funds. It is not a regulator, that is SEBI.

Rupee example

When you buy units, the RTA records it, the custodian safely holds what the scheme bought, and the fund accountant works out the NAV your units are priced at.

Practice

🔥 0 streak

Real exam format. Answer by voice, tap, or press 1 to 4. No negative marking, so always attempt.

Answer by voice

Tap the mic and say A, B, C or D. Typing is optional.

Custody of a scheme's securities is held by the custodian, who is appointed by:

Guarding your assets is a trustee responsibility, so the trustees appoint the custodian.

The AMC manages, it does not appoint the guard of the assets.

Who maintains investor records and processes purchases and redemptions?

The RTA. In practice, names like CAMS and KFintech.

The custodian holds securities, it does not keep your folio records.

The RTA is appointed by:

The RTA is an operating function, so the AMC appoints it.

Guarding roles go to the trustees, operating roles to the AMC.

AMFI is best described as:

AMFI is the industry association. SEBI is the regulator. Do not swap them.

It is not a regulator, a scheme, or a government fund.

To sell mutual funds, a distributor must hold:

An ARN, the AMFI Registration Number, earned after clearing this very exam.

Net worth rules apply to the AMC, not to a distributor.

Who computes a scheme's daily NAV?

The fund accounting function, arranged by the AMC, computes the NAV.

The custodian holds assets, the trustees oversee, SEBI regulates.

Ask the coach

Premium

Stuck on this topic? Premium members ask the AI coach and get a plain-English answer, on the spot. See premium

NISM V-A syllabus

1What a mutual fund really is

2How a fund is built

3Who watches over it

4The offer document, decoded

5Getting funds to investors

6Selling the right way

8NAV, loads and the daily price

9Types of schemes, and picking one

10Return, risk and performance

11How gains are taxed

12Serving the investor

See the full roadmap →