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NISM VA

Intro

NISM VA is a certification meant for Mutual Fund distribution. This is a mandate Certification for those individuals who wish to sell or advise on Mutual Funds.

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

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

Fees: 1500

Validity:

Fees: 1500 Three Years

Curriculum:

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

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