The appointment of an AMC can be terminated by:
The AMC is the investment manager. It launches schemes, invests the money, calculates NAV, markets the schemes and services investors. At least 50% of its directors must be independent of the sponsor and its associates, and its net worth must be at least ₹50 crore, maintained at all times. An AMC director cannot be a trustee or sit on another AMC's board. If control of the AMC changes, it needs prior approval of the trustees and SEBI, and unitholders get an exit window of at least 30 days at NAV without exit load. The AMC can be removed by a majority of the trustees or by 75% of the unitholders.
Worked example
A foreign group buys the sponsor's stake in an AMC. Before this happens, SEBI and the trustees must approve, and every unitholder is told and can exit without load within at least 30 days.
Exam trap: 51% of unitholders is not enough to terminate an AMC; it takes a majority of trustees or 75% of unitholders.