Ch.7 · NAV Calculation Rules · hard
What is 'NAV manipulation' and how does SEBI prevent it?
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EXPLANATION
NAV manipulation could involve mispricing illiquid securities to benefit specific investors (window dressing). SEBI prevents this through: mandatory use of CRISIL/ICRA valuation agencies for debt, last-traded price for equity, independent custodians physically holding assets, independent auditors, SEBI inspections, and fund accounting audits. Trustees must ensure NAV accuracy and face regulatory action for manipulation.
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