Write short notes on the following: Structure of a Mutual Fund

A mutual fund is set up in the form of a trust, which has sponsor, trustees, asset management company and a custodian. The SEBI prescribes comprehensive set of guidelines in the functioning of a mutual fund through the SEBI (Mutual Funds) Regulations, 1996. These regulations stipulate that a mutual fund consist of five important entities, they are: Sponsor - Sponsor is the principal body, who brings the capital as per the guideline issued SEBI to start a mutual fund. Trust & Trustee - Trust is created by sponsor and trustees are appointed to manage the operations of a trust. The trustees' job is to ensure that all the funds are managed as per the defined objective and investors' interest is protected. Asset Management Company (AMC) - The trustee appoints AMC to manage the funds of the investors and, in return, get the fee to manage the fund. Custodian - Custodian job is to the safekeeping of the investors' fund and securities and to ensure that it would be used for intended purpose only. Registrar and Transfer Agent (RTA) - RTAs job is to manage the backend operations of the mutual fund and managing investors' transaction request and other related services.