The trustee is the custodian of the trust of millions of mutual fund investors. Therefore, their responsibility is a fiduciary responsibility. While the trustees are appointed by the AMC and receive fees from the AMC, their primary objective has to be protecting the interests of the AMC and ensure SEBI compliance.

Who is called trustee?

Definition: Trustee is an individual who is responsible for a property or an organization on behalf of some other individual or a third party. Usually the trustee is not to make any profits, for himself, using the resources of the trust.

Who monitors the mutual fund trustees?

The Securities and Exchange Board of India
Sebi provides for assistance to trustees to monitor mutual fund activities. Mumbai: The Securities and Exchange Board of India (Sebi) on Monday issued guidelines to provide administrative assistance to mutual fund trustees for monitoring the various activities of mutual funds.

Who is sponsor in mutual fund?

SEBI regulations say that a fund sponsor is any person or any entity that can set up a Mutual Fund to earn money by fund management. This fund management is done through an associate company which manages the investment of the fund. A sponsor can be seen as the promoter of the associate company.

What are the advantages of mutual fund?

Mutual funds are one of the most popular investment choices in the U.S. Advantages for investors include advanced portfolio management, dividend reinvestment, risk reduction, convenience, and fair pricing. Disadvantages include high fees, tax inefficiency, poor trade execution, and the potential for management abuses.

What is the role of AMC in mutual fund?

You may invest in mutual funds directly with an AMC or asset management company. The company is principally responsible for driving the mutual fund and making decisions that benefit the investors. Under the leadership of a fund manager, it invests the money in line with the investment objectives of the scheme.

Do mutual funds have a trustee?

A trustee in the case of Mutual funds is a holding service who has administrative power for managing the money, property or assets used in mutual funds. The trustee can be an individual person, member of the board of directors, a company or a bank appointed with the approval of the SECP.

Who can become a trustee in an AMC?

The trustee can be an individual person, a member of the board of directors, a company, or a bank appointed with the approval of the SEBI.

What are the responsibilities of a mutual fund trustee?

They also have responsibilities under law. They oversee the performance of the fund, approve the rules and regulations under which it performs (internal rules and regulations!), approve the fee paid to the asset management company (AMC) for its services, and oversee the fund’s compliance program.

What’s the role of a trustee in a trust?

This job is specifically handed over to the TRUSTEES of the trust. So as a unit holder (a.k.a investor) YOU should know the duties and responsibilities of a Trustee: he acts in a fiduciary capacity. He is personally responsible to pay YOU damages from his own funds. The trustee oversees the management and operations of the fund on YOUR behalf .

Who are the trustees of a mutual fund in India?

In the Indian context the mutual fund is structured as a limited company (called the fund house). The sponsor of the fund (for example Hdfc Ltd. and Standard life in the case of Hdfc mutual fund) creates a TRUST to OWN (legally) the money and supervise the managers. This job is specifically handed over to the TRUSTEES of the trust.

How are mutual funds set up in a trust?

A mutual fund is set up either in the form of a trust or an investment company. The trust is established by the Asset Management Company (AMC). The trustee holds the property of the trust for the benefit of its unit holders. Whereas, under the investment company structure, the mutual fund is established as a public listed company.