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Q13: Generally, equity investments in funds are excluded from HFT. Which of the following conditions allows an exception for a bank to include such an investment in HFT?

A
The fund invests solely in Government Securities.
B
The bank can "look through" the fund to its components or obtains daily price quotes with access to mandate information.
C
The fund is listed on a recognized stock exchange and traded weekly.
D
The bank holds less than 10% of the fund's corpus.
✅ Correct Answer: B
An exception exists if the bank meets at least one of two conditions: (a) it can "look through" to individual components with verified frequent information, or (b) it obtains daily price quotes and has access to the fund's mandate/regulations.
Without these transparency levels, the investment cannot be HFT in these Investment Classification MCQs.
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