Ch.3 · Sponsor, Trustee and AMC Roles · medium
Why must the Custodian be independent of the AMC?
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EXPLANATION
SEBI regulations prohibit the AMC and Custodian from being associates of each other. This independence ensures that the entity managing investments (AMC) and the entity holding those assets (Custodian) are separate — preventing potential misappropriation or conflicts of interest in the handling of scheme securities.
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