What happens to the invested amount if the AMC gets shut down?

All the AMCs are regulated by SEBI (Securities and Exchange Board of India) which ensures that the investor’s money is safe. Therefore, if an AMC gets shut down, your invested amount will be safe. Generally, an AMC which call it a quit is taken over by other fund houses. For instance, Morgan Stanley Funds was taken over by HDFC Mutual Fund.

Before closing or selling, an AMC has to send a request to the SEBI which acts as a regulatory body. Only after the approval from SEBI, an AMC can be shut or taken over. However, SEBI also holds the right to close an AMC if the fund house fails to follows the norms.

When an AMC closes, the investors are provided with their invested amount on the basis of the latest NAV of the schemes in which they have invested.

If a fund house decides to take over the AMC, then the schemes are either merged or the AMC continues to work under the monitoring of fund house which bought it.