n NISM Certifications
V-A NISM Series V-A
Medium

Identify the TRUE statement with respect to Trustees of mutual funds.

Practice question from NISM Series V A - Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. The Trustees can legally change the Asset Management Company (AMC)

    Correct answer

  2. B

    The Asset Management Company (AMC) appoints the Trustees

  3. C

    The Trustees appoint the Sponsors of the Asset Management Company (AMC)

  4. D

    The Trustees have to approve the appointment of the distributors of its mutual fund schemes

Why this is the answer

While the AMC is responsible for day-to-day management of the schemes, the Trustees have the authority to terminate or change the AMC if necessary, either by a majority of trustees or through approval by a majority of unit-holders.

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