Ch.3 · Custodian and RTA Functions · hard
What lessons did the UTI US-64 crisis teach about mutual fund regulation?
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EXPLANATION
The US-64 crisis arose because UTI operated outside SEBI's jurisdiction under its own Act, lacked daily NAV-based pricing (units were sold at face value even when NAV fell below it), had weak governance, and invested in illiquid assets. The crisis led to regulatory reforms: all mutual funds brought under SEBI, mandatory daily NAV pricing, stronger trustee independence requirements, and enhanced disclosure norms.
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