A mutual fund is set up in the form of a trust, which comprises of sponsor(s), trustees, an asset management company (AMC) and a custodian. The trust is established by one or more sponsors, who is considered as the promoter of a company and registered with Securities & Exchange Board of India (SEBI). The main role of a trustee is to ensure that the interest of the unit holders is protected while making sure that the mutual fund complies with all the regulations of SEBI.

Asset Management Company (AMC), approved by SEBI, manages the funds by making investments in various types of securities. Along with the day-to-day management of the fund, the AMC also undertakes operational activities like customer services, accounting, marketing and sales functions for the schemes of the mutual fund. The AMC is appointed either by the trustee or the Sponsor after obtaining the approval of SEBI.  Custodian, who is registered with SEBI, has the custody of the all the shares and various other securities bought by the AMC. The custodian is liable for keeping the investment account of the mutual fund.