NISM-Series-V-A: Mutual Fund Distributors Certification Examination

 

The examination seeks to create a common minimum knowledge benchmark for all persons involved in selling and distributing mutual funds including:

• Individual Mutual Fund Distributors
• Employees of organizations engaged in sales and distribution of Mutual Funds
• Employees of Asset Management Companies specially persons engaged in sales and distribution of Mutual Funds

The certification aims to enhance the quality of sales, distribution and related support services in the mutual fund industry.

           

NISM V A : Examination Objectives:

 

On successful completion of the Mutual Fund Distributors examination, the candidate should:

• Know the basics of mutual funds, their role and structure, different kinds of mutual fund schemes and their features
• Understand how mutual funds are distributed in the market-place, how schemes are to be evaluated, and how suitable products and services can be recommended to investors and prospective investors in the market.
• Get oriented to the legalities, accounting, valuation and taxation aspects underlying mutual funds and their distribution.
• Get acquainted with financial planning as an approach to investing in mutual funds, as an aid for mutual fund distributors to develop long term relationships with their clients.

 

Assessment Structure:

 

The Mutual Fund Distributors examination consists of 100 questions of 1 mark each and should be completed in 2 hours. The passing score for the examination is 50%. There shall be no negative marking.

 

Test Details:

 

Name of Module: NISM-Series-V-A: Mutual Fund Distributors Certification Examination

 

* No negative marks for incorrect answers.

 

+ Payment gateway charges extra.

 

# Passing Certificate will be issued only to those candidates who have furnished/ updated their Income Tax Permanent Account Number (PAN) in their registration details.

Curriculum (Mutual Fund Distributors)

 

• I. INVESTMENT LANDSCAPE
• A. Investors and their Financial Goals
• B. Savings or Investments?
• C. Different Asset Classes
• D. Investment Risks
• E. Risk Measures and Management Strategies
• F. Behavioral Biases in Investment Decision Making
• G. Risk Profiling
• H. Understanding Asset Allocation
• I. Do-it-yourself versus Taking Professional Help

 

• II. CONCEPT AND ROLE OF A MUTUAL FUND
• A. Concept of a Mutual fund
• B. Classification of Mutual Funds
• C. Growth of the mutual fund industry in India

 

• III. LEGAL STRUCTURE OF MUTUAL FUNDS IN INDIA
• A. Structure of Mutual Funds in India
• B. Key Constituents of a Mutual Fund
• C. Organization Structure of Asset Management Company
• D. Role and Support function of Service Providers
• E. Role and Function of AMFI

 

• IV. LEGAL AND REGULATORY FRAMEWORK
• A. Role of Regulators in India
• B. Role of Securities and Exchange Board of India
• C. Due Diligence Process by AMCs for Distributors of Mutual Funds
• D. Investor Grievance Redress Mechanism
• E. AMFI Code of Conduct for Intermediaries

 :

• V. SCHEME RELATED INFORMATION
• A. Mandatory Documents
• B. Non-Mandatory Disclosures

 

• VI. FUND DISTRIBUTION AND CHANNEL MANAGEMENT PRACTICES
• A. The role and importance of mutual fund distributors
• B. Different kinds of mutual fund distributors
• C. Modes of distribution
• D. Pre-requisites to become Distributor of a Mutual Fund
• E. Revenue for a mutual fund distributor
• F. Commission Disclosure mandated by SEBI
• G. Due Diligence Process by AMCs for Distributors of Mutual Funds
• H. Difference between distributors and Investment Advisors
• I. Nomination facilities to Agents/Distributors and Payment of Commission to Nominee
• J. Change of distributor

 

• VII. NET ASSET VALUE, TOTAL EXPENSE RATIO AND PRICING OF UNITS
• A. Computation of Net Assets of Mutual Fund Scheme and NAV
• B. Concept of Entry and Exit Load and its impact on NAV
• C. NAV, Total expense ratio and pricing of units for the Segregated Portfolio

 

• VIII. TAXATION
• A. Applicability of taxes in respect of mutual funds
• B. Capital Gains
• C. Dividend income
• D. Stamp Duty on Mutual Fund Units
• E. Setting off of Capital Gains and Losses under Income Tax Act
• F. Securities Transaction Tax
• G. Tax benefit under Section 80C of the Income Tax Act
• H. Tax Deducted at Source
• I. Applicability of GST

 

• IX. INVESTOR SERVICES
• A. The NFO process
• B. New Fund Offer Price/On-going Offer Price for subscription
• C. Investment Plans and Services
• D. Allotment of Units to the Investor
• E. Account statements for investments
• F. Mutual Fund Investors
• G. Filling the Application Form for Mutual Funds
• H. Financial Transactions with Mutual Funds
• I. Cut-off Time and Time Stamping
• J. KYC Requirements for Mutual Fund Investors
• K. Systematic Transactions
• L. Operational aspects of Systematic Transactions
• M. Non-Financial Transactions in Mutual Funds
• N. Change in Status of Special Investor Categories
• O. Investor transactions – turnaround times

 

• X. RISK, RETURN AND PERFORMANCE OF FUNDS
• A. General and Specific Risk Factors
• B. Factors that affect mutual fund performance
• C. Drivers of Returns and Risk in a Scheme
• D. Measures of Returns
• E. SEBI Norms regarding Representation of Returns by Mutual Funds in India
• F. Risks in fund investing with a focus on investors
• G. Measures of Risk
• H. Certain Provisions with respect to Credit risk

 

• XI. MUTUAL FUND SCHEME PERFORMANCE
• A. Benchmarks and Performance
• B. Price Return Index or Total Return Index
• C. Basis of Choosing an appropriate performance benchmark
• D. Benchmarks for equity schemes
• E. Benchmarks for Debt Schemes
• F. Benchmarks for Other Schemes
• G. Quantitative Measures of Fund Manager Performance
• H. Tracking Error
• I. Scheme Performance Disclosure

 

• XII. MUTUAL FUND SCHEME SELECTION
• A. Scheme Selection based on Investor needs, preference and risk-profile
• B. Risk levels in mutual fund schemes
• C. Scheme Selection based on investment strategy of mutual funds
• D. Selection of Mutual Fund scheme offered by different AMCs or within the scheme category
• E. Selecting options in mutual fund schemes
• F. Do’s and Don’ts while selecting mutual fund schemes

 

• Appendix 1: Fifth Schedule of Securities and Exchange Board of India (Mutual Funds) Regulations, 1996 [Regulations 18(22), 25(16), 68(h)]
• Appendix 2: AMFI Code of Ethics
• Appendix 3: AMFI’s Code of Conduct for Intermediaries of Mutual Funds
• Appendix 4: Format of Scheme Information Document (SID)
• Appendix 5: Format of Statement of Additional Information (SAI)
• Appendix 6: Format of Key Information Memorandum
• Appendix 7: KYC Form for Individual
• Appendix 8: KYC Form for Non-Individuals
• Appendix 9: KYC Details Change Form for Individuals
• Appendix 10: KYC Details Change Form for Non-Individuals
• Appendix 11: Process for Aadhaar e-KYC of investors (resident) in the securities markets
• Appendix 12: Procedure for Transmission of Units on Death of a Unitholder
• Appendix 13 – Easy guide for New Distributors
• Appendix 14 – Indian and Global mutual fund industry.
• Appendix 15 – Additional knowledge resources

   

NISM V A certification exam

 

NISM V A certification exam is conducted by the National Institute of Securities Markets (NISM), which is a regulatory body for securities markets in India. This exam is designed for individuals who wish to become mutual fund distributors or work in the mutual fund industry. The certification covers various topics related to mutual funds, including types of mutual funds, their structure, investment strategies, and regulations governing the mutual fund industry in India. The NISM V A certification exam consists of 100 multiple-choice questions, and the duration of the exam is two hours. The passing score for the exam is 50%, and candidates need to score at least 50 marks out of 100 to pass the exam. The exam fee for NISM V A certification is Rs. 1500, and the certification is valid for three years. Candidates who pass the exam are awarded a certificate, which can be used to demonstrate their knowledge and expertise in the mutual fund industry. Overall, the NISM V A certification exam is an important certification for individuals who wish to work in the mutual fund industry in India. It demonstrates their knowledge and understanding of mutual funds, which is essential for providing effective financial advice and services to clients.

   

How to prepare NISM VA exam ?

Here are some tips for preparing for the NISM V A certification exam:

 

• Understand the exam format and syllabus: Before starting your preparation, it is important to understand the format of the exam and the topics that are covered in the syllabus. This will help you to focus your preparation and avoid wasting time on irrelevant topics.
 
• Study the material thoroughly: The NISM V A certification exam covers a wide range of topics related to mutual funds. It is important to study the material thoroughly and understand the concepts and principles behind mutual funds.
 
• Use study material and resources: There are various study materials and resources available online, including practice tests, study guides, and videos. Use these resources to supplement your study and gain a better understanding of the material.
 
• Practice with mock tests: Practice with mock tests to simulate the actual exam environment and assess your knowledge and skills. This will help you to identify areas where you need to improve and focus your study efforts.
 
• Develop a study plan: Develop a study plan and set aside dedicated time each day to study for the exam. This will help you to stay on track and ensure that you cover all the material before the exam.
 
• Revise regularly: Regular revision is essential to retain the material that you have studied. Make sure to revise the material regularly and keep yourself updated with any changes in the syllabus or exam format.
 
• Seek guidance from experts: If you have any doubts or questions, seek guidance from experts or professionals in the mutual fund industry. They can provide valuable insights and help you to clarify any doubts that you may have.
 

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