Ch.5 · NFO Process and Rules · hard
What is the minimum corpus required for a scheme to avoid mandatory winding up as per SEBI regulations?
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EXPLANATION
SEBI regulations specify that if a scheme's AUM falls below ₹10 crore for a specified period, the trustees must explain the reasons to SEBI and the unit holders. Consistently low AUM schemes may be wound up or merged. The ₹10 crore threshold ensures viability — very small schemes cannot efficiently manage costs and provide adequate diversification.
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