NISM V-B Legal and Regulatory Environment — Practice Questions
Questions on the regulators and rules around mutual funds — SEBI and its Mutual Fund Regulations, AMFI and its code of conduct, investor rights, and the mis-selling and conduct rules that bind a distributor.
24 questions on Legal & Regulatory in the ScoreSetu bank — each with a detailed explanation and, where useful, a memory hook.
What this topic covers
- SEBI Mutual Fund Regulations
- AMFI code of conduct
- Investor rights
- Mis-selling and conduct rules
Free sample questions
1. SEBI regulations permit a maximum exit load upto _____ of NAV.
- A. 2%
- B. 5%
- C. 7% ✅
- D. 10%
Answer: C — 7%
Why: SEBI regulations permit exit load upto 7% of NAV. However, in practice, the load is much lower.
💡 SEBI caps exit load at MAX 7% of NAV (actual loads far lower).
2. Who is the main regulator of Mutual Funds in India ?
- A. RBI
- B. AMFI
- C. Finance Ministry
- D. SEBI ✅
Answer: D — SEBI
Why: SEBI regulates the capital markets including mutual funds, other funds, depositories, custodians and registrars & transfer agents in the country.
💡 SEBI = main regulator of mutual funds & capital markets in India (not RBI/AMFI).
3. Under the current regulatory environment, _______ is not permitted on purchase of Mutual Fund units.
- A. entry load ✅
- B. exit load
- C. Both 1 and 2
- D. None of the above
Answer: A — entry load
Why: Under the current regulatory environment, entry load is not permitted. Therefore, investors subscribe to units of open-end schemes at the NAV. Earlier, open end schemes could fix the Sale Price higher than NAV. The difference was called entry load.
💡 SEBI BANNED entry load -> investors buy open-end units at NAV (no add-on).
Practise all 24 Legal & Regulatory questions
Plus the full 369-question NISM V-B bank and real-feel mock exams.