alleryStart learning →The Sponsor of a mutual fund must have been in the financial services business for at least
A5 years
B3 years
C1 year
D10 years
Answer & Solution
Correct answer: A. 5 years
1. SEBI sets eligibility norms to ensure sponsors have a proven track record.
2. The sponsor must have carried on financial services business for not less than 5 years.
3. It must also show positive net worth in each of the immediately preceding 5 years.
4. It must have earned profits after tax in 3 of the last 5 years, including the fifth year.
_Source: NISM Series V-A: Mutual Fund Distributors Workbook (Dec 2019), Ch 3 "Legal Structure of Mutual Funds in India", §3.2.1_
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