alleryStart learning →The appointment of an AMC can be terminated by
ASEBI acting alone without prior notice
BTrustees by majority or 75 percent of unit holders
CThe Sponsor at its sole discretion at any time
DThe Custodian on written notice to SEBI
Answer & Solution
Correct answer: B. Trustees by majority or 75 percent of unit holders
1. The AMC serves at the pleasure of the trustees, subject to SEBI approval.
2. Termination can be initiated by a majority of the trustees.
3. Alternatively, 75 percent of the unit holders can vote to terminate the AMC.
4. Any change in the AMC is subject to prior approval of SEBI and the unit holders.
_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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