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      Question

      The primary regulatory objective of SEBI in the context

      of 'Mutual Funds' is to:
      A Guarantee returns to investors. Correct Answer Incorrect Answer
      B Promote, regulate, and ensure the integrity of the mutual fund industry and protect unit holders. Correct Answer Incorrect Answer
      C Set the investment portfolio for each fund. Correct Answer Incorrect Answer
      D Act as a sponsor for mutual funds. Correct Answer Incorrect Answer
      E Directly manage mutual fund schemes. Correct Answer Incorrect Answer

      Solution

      • SEBI's role is that of a  market regulator , not a portfolio manager or guarantor. Under the SEBI Act, 1992 and the SEBI (Mutual Funds) Regulations, 1996, its key objectives regarding mutual funds are:
        • Regulate  the establishment, operation, and management of mutual funds.
        • Protect the interests of unit holders  (investors) by ensuring transparency, fair valuation, and proper disclosure of risks.
        • Promote  the development of a healthy and orderly mutual fund industry.
        • Ensure the integrity  of the market by preventing fraud and malpractices.
          SEBI does not guarantee returns (option a is false) or decide portfolios (option c). Sponsors are independent entities (option d).

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