What are the regulations that govern a mutual fund ?

The process of setting up a Mutual Fund is initiated by a sponsor. The sponsor creates a Trust (the fund) under the Indian Trust Act. The Trust in turn appoints an Asset Management Company (AMC). The trustees are responsible for safeguarding the interests of the investors in the Mutual Fund by ensuring that the operations of the fund comply with the relevant regulations. The fund also has to be approved by the market regulator, which is the Securities and Exchange Board of India (SEBI).