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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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