NISM XB
Intro
The examination seeks to create a common minimum knowledge benchmark for an individual investment adviser or principal officer of a non-individual investment adviser, under SEBI (Investment Advisers) Regulations, 2013 and persons associated with investment advice.
NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination is the level 1 examination and NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination is the level 2 examination.
An individual investment adviser or principal officer of a non-individual investment adviser, registered under SEBI (Investment Advisers) Regulations, 2013 and persons associated with investment advice are required to pass both the levels (i.e. NISM-Series-X-A: Investment Adviser (Level 1) Certification Examination and NISM-Series-X-B: Investment Adviser (Level 2) Certification Examination to fulfill the requirements under SEBI (Investment Advisers) Regulations, 2013.
The certification aims to enhance the quality of investment advisory and related services in the financial services industry.
Examination Objectives
On successful completion of the Investment Adviser certification examination, the candidate should:
- Know the aspects of insurance planning, insurance products and risk management.
- Understand the various retirement products and their features along with the role of Investment Advisers in retirement planning.
- Understand the importance of estate planning and the role of estate planning tools.
- Know the taxation aspects of different financial securities.
- Know the role of behavioural finance and risk profiling in providing comprehensive financial advice by the Investment Adviser.
Assessment Structure
The Investment Adviser (level 2) certification examination consists of 6 caselets with 5 multiple-choice questions of 2 marks each per caselet and 90 multiple-choice questions of 1 mark each adding up to 150 marks. The examination should be completed in 3 hours. There is a negative marking of 25% of the marks assigned to a question. The passing score for the examination is 60%.
| Multiple Choice Questions [90 questions of 1 mark each] | 90*1 = 90 |
| Case-based Questions [6 cases (each case with 5 sub-questions of 2 mark each)] |
6*5*2 = 60 |
Curriculum
MODULE 7: RISK MANAGEMENT AND INSURANCE PLANNING
I. BASICS OF INSURANCE
A. Some Simplistic/Common Examples
B. Need for Insurance
C. Fundamental Principles of Insurance
D. Concepts in Insurance
E. Role of Insurance in Personal Finance
F. Investing through Insurance
G. Role of Insurance Adviser
H. Regulations pertaining to Insurance
II. LIFE INSURANCE PRODUCTS
A. Life Insurance Products
B. Life Insurance Needs Analysis
C. Types of Life Insurance Products
D. Facilities available under life insurance policies
E. Insurance under Married Women’s Property Act (MWPA)
F. Benefits/Limitation and Provisions when insurance taken from multiple companies
G. Criteria to evaluate various life insurance product
H. Global coverage for different life insurance products
III. NON-LIFE INSURANCE PRODUCTS
A. Non-Life Insurance
B. Benefits/limitations and provisions when insurance is taken from multiple companies
C. Understand the criteria to compare various insurance products
D. Understanding global coverage for different General Life insurance products
MODULE 8: RETIREMENT PLANNING
IV. RETIREMENT PLANNING BASICS
A. Need of Retirement Planning
B. Financial goals and Retirement
C. Retirement Planning
D. Estimating Retirement Corpus
E. Employee benefits and superannuation benefits
V. RETIREMENT PRODUCTS
A. Accumulation related products
B. Portfolio created by an Investment Adviser
C. Distribution Related Products
VI. MISCELLANEOUS ASPECTS OF RETIREMENT PLANNING
A. Advisor’s role in Retirement Planning
B. Calculations for Retirement Planning
C. Criteria to evaluate various retirement benefit products
D. Discuss about Philanthropy
MODULE 9: TAXATION
VII. CONCEPTS IN TAXATION
A. Framework
B. Key concepts
C. Income
D. Residential status
E. Five Heads of Income
F. Clubbing of Income
G. Set off and Carry forward of Losses
H. Exempt incomes
I. Deductions under Chapter VI-A
J. Rebate under section 87A
K. Minimum Alternate Tax (MAT)
L. Alternate Minimum Tax (AMT)
M. Gross Total Income
N. Total Income
O. Computation of Tax Payable
P. Double Tax Avoidance Agreement (DTAA)
Q. Taxation Regime
R. Maximum Marginal Rate of Tax (MMR)
S. Effective Rate of Tax
T. Tax Alpha
U. General Anti-Avoidance Rules (GAAR)
VIII. CAPITAL GAINS
A. Basic Concepts
B. Capital asset
C. Types of Capital Asset
D. Transfer
E. Computation of Capital Gains from Transfers
IX. INCOME FROM OTHER SOURCES
A. Introduction
B. Dividend Income
C. Interest on Securities
D. Gift of Securities
E. Shares issued at Premium by closely-held Company
F. Applicability of Income Computation and Disclosure Standards (ICDS)
X. TAXATION OF DEBT PRODUCTS
A. Sources of Income from Debt Products
B. Types of Debt Products
C. Mutual Funds
D. Masala Bonds
E. Foreign Currency Convertible Bonds
F. Financial Securities
G. Taxation of Non-residents
XI. TAXATION OF EQUITY PRODUCTS
A. Sources of Income
B. Listed Equity Shares
C. Tax Treatment of Unlisted Equity Shares
D. Tax Treatment of Preference Shares
E. Tax Treatment for GDR/ ADR
F. Tax Treatment of Shares Warrants
G. Tax Treatment of Mutual Funds
H. Tax Treatment of Derivatives
I. Dividend Stripping
J. Bonus Stripping
K. Benefits not allowed from Capital Gains
L. Adjustment of Exemption Limit from Capital Gains
M. Overview of Taxation of Equity Products
XII. TAXATION OF OTHER PRODUCTS
A. Taxation of Employees Stock Option Plan (ESOP)
B. Sovereign Gold Bonds (SGBs)
C. National Pension System (NPS)
D. Real Estate Investment Trust (REIT)
E. Infrastructure Investment Trust (InVIT)
F. Alternative Investment Funds (AIFs)
G. Exchange Traded Funds (ETFs)
H. Tax aspects of Life Insurance Products
I. Tax aspects of Reverse Mortgage
J. Taxation of other Derivative Products
XIII. TAX PROVISIONS FOR SPECIAL CASES
A. Taxation of Bonus Shares
B. Taxation on Share Split or Consolidation of Shares
C. Taxation of Buyback of Shares
D. Taxation of Companies in Liquidation
E. Taxation of Rights Issues
F. Taxation in case of Mergers & Acquisitions
G. Taxation in case of Stock Lending and Borrowing
H. Taxation in case of conversion of Preference Shares into Equity Shares
I. Taxation in case of Conversion of Stock into Capital Asset
J. Taxation in case of Segregated Portfolios of Mutual Funds
K. Taxation in case of Consolidation of Mutual Fund schemes or plans
L. Taxation in case of winding up of Mutual Funds
Annexure 1: Tax Rates for Assessment Year 2021-22
Annexure 2: Exemptions under Income-tax Act
Annexure 3: Cost Inflation Index
MODULE 10: ESTATE PLANNING
XIV. BASICS OF ESTATE PLANNING
A. Estate Planning
B. What Constitutes Estate?
C. Elements of Estate Planning
D. Applicable Laws
E. Mutation
XV. TOOLS FOR ESTATE PLANNING
A. Various tools for estate planning
B. Concept of Wills
C. Probate Process
D. Gifts, Joint Holding and Nominations
E. Family Settlement
F. Trust-Characteristics and Regulations
G. Powers of Attorney
MODULE 11: BEHAVIOURAL FINANCE
XVI. BASICS OF BEHAVIOURAL FINANCE
A. Behavioural Finance versus Standard Finance
B. How do individuals make decision?
C. Categorization of Biases
D. Fusion Investing
E. Behavioural Finance explains Market Anomalies
F. Behavioural Finance explains Bubbles and Crashes
XVII. BEHAVIOURAL FINANCE IN PRACTICE
A. Role of emotions in goal setting
B. Nudging the investor to behave better
C. Role of Investment Adviser in management of client emotions
MODULE 12: COMPREHENSIVE INVESTMENT ADVICE
XVIII. RISK PROFILING FOR INVESTORS
A. Risk profiling for investors and risk profiling approach
B. Parameters for risk profiling
C. Role of Risk profiling in Asset allocation
XIX. COMPARISON OF PRODUCTS ACROSS CATEGORIES
A. Performance data for investment products
B. Attribute portfolio performance and Evaluation of investment alternatives
C. Other Comparatives
X. CASE STUDIES IN COMPREHENSIVE FINANCIAL ADVICE
A. 20.1 Case 1
B. 20.2 Case 2
C. 20.3 Case 3
D. 20.4 Case 4