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Ch.3 · Sponsor, Trustee and AMC Roles · hard

Can a trustee be an associate of the AMC?

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EXPLANATION

Up to one-third of trustees may be associates of the sponsor or AMC — these are 'associate trustees.' The remaining two-thirds must be independent. This balance allows the sponsor some representation on the board while ensuring an independent majority to protect unit holders.

A.Yes, without any restriction

B.Yes, but only up to one-third of trustees can be associates [✓ Correct]

C.No, all trustees must be completely independent of the AMC

D.Only associate trustees need SEBI's special approval

EXPLANATION

Up to one-third of trustees may be associates of the sponsor or AMC — these are 'associate trustees.' The remaining two-thirds must be independent. This balance allows the sponsor some representation on the board while ensuring an independent majority to protect unit holders.

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