Mutual Fund Distributors Certification Examination

To become a mutual fund distributor, one must pass the NISM-Series-V-A: Mutual Fund Distributors Certification Examination, organised by the National Institute of Securities Market. Read on to know more about this certification examination.
EXPLORE FUNDS
Mutual Fund Distributors Certification Examination
EXPLORE FUNDS
3 min
28-August-2024
The Mutual Fund Distributor Exam, known as the NISM-Series-V-A: Mutual Fund Distributors Certification Examination, is essential for anyone aiming to become a mutual fund distributor in India. Conducted by the National Institute of Securities Markets (NISM), NISM mutual fund exam ensures that candidates possess the minimum required knowledge to engage in mutual fund sales and distribution. Successfully passing this exam grants candidates an ARN (AMFI Registration Number), officially certifying them as mutual fund distributors.

Becoming a mutual fund distributor in India involves clearing the NISM Mutual Fund Distributor Exam. This certification is designed to establish a standardised knowledge base for individuals involved in the sales and distribution of mutual funds. The NISM mutual fund exam certification aims to enhance the quality of sales, distribution, and related support services in the mutual fund industry. It is a crucial step for anyone looking to enter this field, providing them with the credentials needed to operate professionally and effectively in helping people investing in mutual funds. In this article, we will discuss the mutual fund distributor exam.

Which exam to give to become a mutual fund distributor in India?

To become a mutual fund distributor in India, one must pass the NISM-Series-V-A: Mutual Fund Distributors Certification Examination. This exam is organised by the National Institute of Securities Markets (NISM). The NISM exam is designed to ensure that candidates possess the necessary knowledge and skills to engage in mutual fund sales and distribution. After successfully passing this exam, candidates receive an ARN (AMFI Registration Number), which allows them to legally operate as mutual fund distributors. The exam covers various aspects of mutual funds, including their structure, management, and regulatory environment, ensuring that certified individuals are well-equipped to provide high-quality sales and distribution services.

All about mutual fund distributor exam (NISM exam)

The NISM-Series-V-A: Mutual Fund Distributors Certification Examination, commonly known as the NISM Exam, is organised by the National Institute of Securities Markets. This exam is mandatory for anyone looking to become a mutual fund distributor in India. It aims to establish a common minimum knowledge standard for individuals involved in mutual fund sales and distribution. The exam is open to individual mutual fund distributors, employees of organisations engaged in sales and distribution of mutual funds, and employees of asset management companies involved in mutual fund sales.

The certification enhances the quality of sales, distribution, and related support services in the mutual fund industry, ensuring that all certified individuals have a solid understanding of mutual funds, their management, and regulatory requirements.

NISM exam eligibility

To be eligible for the NISM Mutual Fund Distributor Exam, candidates must meet the following criteria:

  • Age requirement: Candidates must be 18 years or older.
  • Educational qualification: No specific educational qualifications are required as per the Association of Mutual Funds in India (AMFI).
These minimal eligibility requirements make the exam accessible to a wide range of individuals interested in becoming mutual fund distributors.

Mode to appear in the NISM mutual fund distributor exam

The NISM Mutual Fund Distributor Exam can be taken in two languages: Hindi and English. For Hindi, the exam is conducted offline, while for English, candidates have the option to take the exam either online or offline. This flexibility allows candidates to choose the mode and language they are most comfortable with, making the exam process more accessible and convenient.

How much NISM exam fee to be submitted?

To register for the NISM Mutual Fund Distributor Exam, candidates must pay a fee of Rs. 1,500. The payment can be made online using a credit card, debit card, or net banking. This fee covers the cost of the exam and ensures that candidates are officially registered to take the test, allowing them to proceed with their certification process.

What is the validity for a NISM certificate?

The NISM Certificate for mutual fund distributors is valid for three years. After this period, certified individuals must renew their certification to continue operating as mutual fund distributors. This ensures that distributors stay updated with the latest regulations, industry practices, and market trends, maintaining high standards of knowledge and service in the mutual fund industry.

NISM exam pattern

The NISM Mutual Fund Distributor Exam consists of 100 questions, each worth one mark, for a total of 100 marks. To pass the exam, candidates must score at least 50%. There is no negative marking, allowing candidates to answer all questions without the risk of losing marks for incorrect answers. This straightforward exam pattern makes it easier for candidates to focus on demonstrating their knowledge.

How to enrol for the NISM exam?

Enrolling for the NISM mutual fund exam involves a few simple steps:

  • Visit the NISM website: Go to the official NISM website.
  • Create an account: Register by providing your details and creating an account.
  • Select the exam: Choose the NISM-Series-V-A: Mutual Fund Distributors Certification Examination.
  • Pay the fee: Pay the exam fee of Rs. 1,500 online.
  • Schedule the exam: Select a suitable date, time, and mode (online/offline) for your exam.
These steps ensure a smooth and hassle-free enrollment process for candidates.

NISM exam syllabus

The NISM mutual fund exam syllabus encompasses a wide range of topics crucial for understanding the mutual fund industry. It includes investment concepts, mutual fund roles, legal structures, regulatory frameworks, scheme information, distribution practices, NAV and pricing, taxation, investor services, risk and performance analysis, and scheme selection. This comprehensive curriculum ensures that candidates are well-equipped with the necessary knowledge to excel as mutual fund distributors.

I. Investment landscape

  • Understand parameters of the Indian economy
  • Describe investors and their financial goals
  • Understand savings and investment
  • Understand investment risk classifications
  • Explain risk measure and management strategies
  • Understand behavioural biases in investment decisions
  • Understand risk profiling
  • Explain asset allocation
  • Compare do-it-yourself and professional help approaches

II. Concept & role of a mutual fund

  • Understand mutual fund classifications
  • Describe the growth of the mutual fund industry in India

III. Legal structure of mutual funds in India

  • Understand key constituents of a mutual fund
  • Understand the organisation structure of Asset Management Companies (AMC)
  • Understand the role and support functions of mutual fund service providers
  • Explain the role and function of the Association of Mutual Funds in India (AMFI)

IV. Legal and regulatory framework

  • Describe the role of regulators in India
  • Discuss the role of the Securities and Exchange Board of India (SEBI)
  • Know the due diligence process followed by AMCs for mutual fund distributors
  • Explain investor grievance and redressal standards (SCORES)
  • Understand AMFI Code of Conduct for intermediaries

V. Scheme related information

  • Understand mandatory documents, their purpose, and significance
  • Explain non-mandatory disclosures

VI. Fund distribution and channel management practices

  • Explain the role and importance of mutual fund distributors
  • Understand the classification of mutual fund distributors
  • Explain modes of distribution
  • Understand prerequisites to become a mutual fund distributor
  • Explain revenue for a mutual fund distributor
  • Know SEBI's commission disclosure mandate
  • Explain AMC due diligence for distributors
  • Discuss nomination facilities and payment of commission to nominees
  • Explain the change of distributor process

VII. Net asset value, total expense ratio, and pricing of units

  • Discuss fair valuation principles
  • Compute net assets of a mutual fund scheme and NAV
  • Explain dividends and distributable reserves
  • Understand entry and exit loads and their impact on NAV
  • Know key accounting and reporting requirements for mutual funds

VIII. Taxation

  • Understand various taxes applicable to mutual funds
  • Understand capital gains and capital gains tax (long-term and short-term)
  • Understand dividend income and dividend income tax
  • Differentiate between dividend distribution tax and capital gains tax
  • Understand setting off gains and losses under the Income Tax Act
  • Understand Securities Transaction Tax (STT)
  • Know tax benefits under Section 80C for mutual fund investments
  • Understand Tax Deducted at Source (TDS) in mutual funds
  • Understand GST applicability in mutual funds

IX. Investor services

  • Describe the New Fund Offer (NFO) process
  • Explain NFO price and ongoing subscription price
  • Discuss different investment plans and options
  • Explain mutual fund unit allotment
  • Describe the content and periodicity of investment statements
  • Describe different types of mutual fund investors
  • Explain how to fill mutual fund application forms
  • Describe financial transactions with mutual funds (purchase, redemption, and switches)
  • Explain cut-off time and time stamping
  • Describe KYC requirements for mutual fund investors
  • Explain different types of systematic transactions
  • Explain operational aspects of systematic transactions
  • Explain non-financial transactions in mutual funds
  • Discuss status changes for special investor categories
  • Explain investor transaction turnaround times

X. Risk, return, and performance of funds

  • Understand general and specific risk factors
  • Explain factors affecting mutual fund performance
  • Describe drivers of returns and risk in mutual fund schemes
  • Understand measures of returns
  • Know SEBI norms for return representation by mutual funds
  • Explain risks in fund investing
  • Understand measures of risk
  • Explain credit risk provisions

XI. Mutual fund scheme performance

  • Explain the concept of benchmarks
  • Choose appropriate performance benchmarks
  • Evaluate equity fund performance using market benchmarks
  • Evaluate debt fund performance using market benchmarks
  • Evaluate other schemes using market benchmarks
  • Explain quantitative measures of fund manager performance
  • Define tracking error
  • Understand sources for scheme performance disclosure (scheme documents, AMFI, AMC websites, fund fact sheets)

XII. Mutual fund scheme selection

  • Explain scheme selection based on investor needs, preferences, and risk profile
  • Explain risk levels in mutual fund schemes
  • Explain scheme selection based on investment strategy
  • Select mutual fund schemes offered by different AMCs or within scheme categories
  • Know the dos and don’ts while selecting mutual fund schemes

Conclusion

Understanding the NISM mutual fund exam syllabus is crucial for anyone aspiring to become a mutual fund distributor. The comprehensive coverage of topics ensures that candidates are well-prepared to meet industry standards and provide high-quality service. The Bajaj Finserv Platform, with over 1000+ mutual fund schemes listed, offers an excellent opportunity for certified distributors to leverage their knowledge and help investors achieve their financial goals providing them with a mutual fund calculator and the option to compare mutual funds. The platform's extensive resources and support make it an ideal choice for both new and experienced mutual fund distributors.

Essential tools for all mutual fund investors

Systematic Investment Plan Calculator Lumpsum CalculatorStep Up SIP CalculatorAxis Bank SIP Calculator
SBI SIP CalculatorHDFC SIP CalculatorNippon India SIP CalculatorABSL SIP Calculator


Frequently asked questions

What are current assets examples?
Current assets include cash, cash equivalents, accounts receivable, stock inventory, marketable securities, pre-paid liabilities, and other liquid assets that can be quickly converted to cash within one year. These assets are essential for meeting a company’s short-term obligations and maintaining operational liquidity.

What are current and fixed assets?
Current assets are short-term assets typically used up or converted into cash within one year, such as cash, inventory, and accounts receivable. Fixed assets, also known as non-current assets, are long-term assets held for more than one year, including property, machinery, and equipment.

What are current and noncurrent assets?
Current assets are those expected to be converted to cash or used up within one year, such as cash, inventory, and accounts receivable. Non-current assets, also known as long-term assets, are not expected to be liquidated within a year and include items like property, plant, and equipment.

What is the definition of net current assets?
Net current assets (NCA) is the value remaining after subtracting current liabilities from current assets. It represents a company’s ability to cover its short-term obligations with its short-term assets, indicating financial health and liquidity.

How to find current assets?
To find current assets, sum up all assets that are expected to be converted to cash or used up within one year. This includes cash, cash equivalents, accounts receivable, inventory, and other liquid assets. Accurate records and financial statements are essential for this calculation.

Is a bank a current asset?
A bank account is considered a current asset because it holds liquid funds that can be easily accessed and used to meet short-term obligations. This includes checking and savings accounts, which are crucial for a company's financial operations.

What are called current assets?
Current assets are assets expected to be converted into cash or used up within one year. These include cash, cash equivalents, accounts receivable, inventory, and other short-term investments. They are vital for ensuring smooth financial operations and meeting immediate liabilities.

What is total current assets?
Total current assets is the aggregate value of all current assets held by a company, such as cash, accounts receivable, and inventory. This figure is critical for calculating the current ratio, which measures a company’s ability to meet short-term obligations.

Show More Show Less

Related videos

Bajaj Finserv App for All Your Financial Needs and Goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Explore and apply for co-branded credit cards online.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on No Cost EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.
Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer:

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.

This information should not be relied upon as the sole basis for any investment decisions.Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.

Show All Text

Disclaimer:

Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319

BFL does NOT:

(i) provide investment advisory services in any manner or form:

(ii) carry customized/personalized suitability assessment:

(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.

In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.

Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.

Disclaimer on Risk-O-Meter:

Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.

Show All Text