What is the primary purpose of side pocketing in mutual funds?

"To enhance the returns of high-risk investments" "To separate illiquid investments from liquid ones in a debt portfolio" "To guarantee the performance of all assets within a fund" "To provide tax benefits for investors holding illiquid assets"

How does side pocketing impact the Net Asset Value (NAV) of a mutual fund?

"The NAV remains unchanged as side pocketing doesn't affect it" "The NAV only reflects the value of liquid assets after side pocketing" "The NAV is calculated based on the average value of all assets, including illiquid ones" "The NAV is suspended until all illiquid assets are resolved"

According to the article, what is a potential concern regarding the valuation of illiquid assets in side pocketing?

"The valuation is often subjective and may not accurately reflect the true worth" "Illiquid assets are always valued at zero, negatively impacting the NAV" "The valuation process is too complex for average investors to understand" "There are no established methods for valuing illiquid assets"

What regulatory body in India is responsible for overseeing the implementation of side pocketing in mutual funds?

"Reserve Bank of India (RBI)" "Securities and Exchange Board of India (SEBI)" "Association of Mutual Funds of India (AMFI)" "Insurance Regulatory and Development Authority of India (IRDAI)"

Why was the Association of Mutual Funds of India (AMFI) initially interested in establishing rules for side pocketing?

"To increase the complexity of mutual fund operations" "To protect fund managers from potential legal liabilities" "To respond to a specific case of default by a major asset management company" "To encourage more investment in illiquid and high-risk assets"