Ch.3 · Custodian and RTA Functions · medium
What restriction exists regarding the AMC and Custodian being associates?
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EXPLANATION
SEBI regulations explicitly prohibit the AMC and Custodian from being associates. This independence requirement ensures proper checks and balances — the Custodian independently holds and verifies the assets, while the AMC manages investments. If they were associates, there would be a conflict of interest in asset safekeeping.
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