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The minimum net worth prescribed for an Asset Management Company is
A{'text': 'Rs. 5 crore', 'label': 'A'}
B{'text': 'Rs. 10 crore', 'label': 'B'}
C{'text': 'Rs. 25 crore', 'label': 'C'}
D{'text': 'Rs. 50 crore', 'label': 'D'}
Answer & Solution
Correct answer: D. {'text': 'Rs. 50 crore', 'label': 'D'}
1. The AMC handles day-to-day scheme operations and needs financial substance.
2. SEBI regulations require an AMC to have a minimum net worth of Rs. 50 crore.
3. Trustees must review the AMC net worth every quarter and ensure any shortfall is made up.
4. A lower net worth does not meet the regulatory threshold.
_Source: NISM Series V-A: Mutual Fund Distributors Workbook (Dec 2019), Ch 3 "Legal Structure of Mutual Funds in India", §3.2.4_
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