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Community User Posted on 11:46am 21-Dec-2019

What is the legal structure of mutual funds in India?

Mutual fund structure consist of five important entities:


1. Sponsor - Sponsor is the principal body, who brings the capital as per the guideline issued by SEBI to start a mutual fund. For example, in ICICI Prudential mutual fund, ICICI Bank and Prudential Plc. are the sponsors.
 

2. Trust & Trustee - Trust is created by sponsor and trustees are appointed to manage the operations of a trust. The trustees' job is to ensure that all the funds are managed as per the defined objective and investors' interest is protected.
 

3. Asset Management Company (AMC) - Trustee appoints AMC to manage the funds of the investors and, in return, get the fee to manage the fund.
 

4. Custodian - Custodian job is to the safekeeping of the investors' fund and securities and to ensure that it would be used for intended purpose only.
 

5. Registrar and Transfer Agent (RTA) - RTAs job is to manage the backend operation of the mutual fund and managing investors' transaction request requests and other related services.

 

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