What SEBI requires
The rules that keep your money safe
This is one of the two topics people find hardest, because it is all rules and roles. So we will not list them coldly. We will show you who holds the keys, and the rest sticks.
This lesson teaches a concept for the NISM Series V-A exam. It is education, not financial advice.
- 1
SEBI is the market regulator. It sets the rules every fund must follow.
- 2
A fund is set up as a trust, so your money is kept separate from the company that runs it.
- 3
Three roles keep it honest: the sponsor starts it, the trustees guard it, the AMC manages it.
- 4
Regular disclosures mean you can always see where your money sits.
Your money lives in the trust, not on the fund company's books. If the company shut tomorrow, your holdings are still ring-fenced and safe.
The sponsor builds the house. It puts up the initial capital and sets the fund up, then steps back.
Sponsor starts itThe trustees hold the keys. They do not manage money, they watch over it on behalf of investors.
Trustees guard itThe AMC lives in the house and does the work: it picks the investments and runs the schemes day to day.
The AMC manages itSEBI is the inspector at the gate, checking that everyone follows the rules and investors are told the truth.
SEBI checks itSponsor starts it, trustees guard it, the AMC runs it, SEBI checks it.
Practice
🔥 0 streakReal exam format. Answer by voice, tap, or press 1 to 4. No negative marking, so always attempt.
Why is a mutual fund set up as a trust?
Who is the regulator that sets mutual fund rules in India?
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Education for the exam, not financial advice. Answers can be wrong, so confirm figures against the workbook.