INSPECTION AND AUDIT :
SEBI is empowered to appoint inspecting officer to inspect and investigate the affairs of a mutual fund, the trustees, the AMC etc. SEBI may give a notice to the fund before such inspection or may dispense with it, if it feels the need.
Regulation 63 indicates the obligations of the mutual fund, trustees or AMC when they are taken up for inspection by SEBI.
The inspecting officer shall submit his reports to SEBI and SEBI after considering the same communicate the findings of the inspecting officer to the mutual fund, trustees or AMC and give him an opportunity to be heard.