alleryStart learning →A close-ended scheme provides post-NFO liquidity to investors mainly through
ARedemption at the AMC office
BDirect sale back to the sponsor
CListing of units on a stock exchange
DBuyback by SEBI at NAV
Answer & Solution
Correct answer: C. Listing of units on a stock exchange
1. Close-ended schemes accept money from the fund only during the NFO.
2. To let investors exit later, the units are compulsorily listed on a stock exchange.
3. Existing holders sell to other investors on the exchange, not to the scheme.
4. The exchange price often trades at a discount to NAV due to demand-supply.
_Source: NISM Series V-A: Mutual Fund Distributors Workbook (Dec 2019), Ch 2 "Concept and Role of a Mutual Fund", §2.2.1_
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