All About NISM Certification Exam

NISM-Series-V-A: The National Institute of Securities Market administers the Mutual Fund Distributors Certification Examination (NISM Certification Exam). The prospect does not receive the ARN Number and become a Mutual Fund Agent until they have passed the NISM Certification exam. The goal of the NISM certification exam is to create a uniform minimum knowledge requirement for all candidates involved in the sales and distribution of mutual funds, including individual distributors, employees of companies that sell and distribute mutual funds, and employees of asset management companies (AMC), particularly those who work in this field. The goal of the certification is to improve the industry’s distribution, sales quality, and related support services.

Key Highlights

1 . Eligibility Requirements for NISM Certification Exam
2 . Examination Modes for NISM Exam
3. Fee Structure for NISM Certification
4 . Validity Period of NISM Certificate
5 . Exam Format for NISM Certification
6 . Module Name for NISM Series VA
7 . Enrollment Process for NISM Examinations
8 . Syllabus for NISM Certification Exams
9 . Study Resources for NISM Examinations
10 . Common Queries about NISM Certification
11. Becoming a Certified Mutual Fund Distributor

12. NISM Exam Syllabus

NISM Exam Eligibility:

As per The National Institute of Securities Market (NISM) guidelines:

Individuals aged 18 years and above are eligible to take the NISM Certification Exam and pursue a career as a mutual fund distributor or advisor.
The Association of Mutual Fund (AMFI) website does not specify any educational qualifications for participation.

Mode to Appear in the NISM Mutual Fund Distributor Exam:

According to information provided on the Association of Mutual Fund (AMFI) website regarding NISM details:

Candidates have the option to take the examination in either Hindi or English language. The mode of the NISM Certification Exam for becoming a mutual fund distributor is Offline for the Hindi language, whereas for English, candidates have the choice of both Online and Offline modes

How Much NISM Exam Fee to be submitted?

During the registration process for the NISM Mutual Fund distributor exam, individuals are required to submit an examination fee of Rs.1,500/-. Payment can be made online through Credit Card/Debit Card or net banking.

What is the Validity for a NISM Certificate?

As per the NISM details available at Association of Mutual Fund (AMFI) website, the certificate will be valid for around 3 years.

NISM Exam Pattern:

The examination consists of 100 questions, each valued at 1 mark, totaling a maximum score of 100 marks.
To pass the examination, candidates must achieve a minimum score of 50%.
There is no negative marking system in place for incorrect answers.

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

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

Fees (Rs.)	Test Duration (in minutes)	No. of Questions	Maximum Marks	Pass Marks (%)	Certificate Validity (in years)
1500+	120 min	100	100	50	3

How to Enroll for The NISM Certification Exam?

To complete the NISM certification exam registration process:

1. NISM Login to the website and navigate to the ‘New Account’ option

2. Fill out your profile information, and ensure you have scanned copies of your passport-sized photo, Aadhar Card, and PAN Card in JPG format for upload.

3. After registration, profile approval typically occurs within 3 days following verification of exam registration details

4. NISM Login again to schedule the NISM Series V-A exam, available in both Hindi and English languages. The booking process includes selecting your preferred city, time slot, and payment of the Rs.1,500 exam fee.

5. If you opt for an online exam from home, select the “online” option in the location field during the NISM Login process.

6. Access the workbook provided on the NISM portal to get familiar with the NISM exam syllabus and prepare for the exam

7. NISM Login one more time upon successfully passing the exam, and proceed to apply for your ARN.

Tip: Always book exam after 3 weeks so that you can prepare for the exam

NISM Exam Syllabus:

In order to qualify the NISM Exam, it is necessary for the personnel to understand the whole NISM Examination Syllabus. Following are the topics included in the NISM Curriculum.

I. Investment Landscape

Understand the parameters of the Indian Economy: Describe about Investors and their Financial Goals
Understand Savings and Investment
Discuss Different Asset Classes
Understand the Classification of Investment Risks
Explain Risk Measure and Management Strategies
Understand Behavioral Biases in Investment Decision Making
Understand Risk Profiling
Explain the Asset Allocation
Comparison between the two approaches – Do-it-yourself and Taking Professional Help

II. Concept & Role of a Mutual Fund

Explain the Concept of Mutual Fund
Understand the Classifications of Mutual Funds
Describe the Growth of the Mutual Fund Industry in India

III. Legal Structure of Mutual Funds in India

Describe the Structure of Mutual Funds in India
Understand the Key Constituents of a Mutual Fund
Understand the Organisation Structure of Asset Management Company
Understand the Role and Support Functions of Service Providers of Mutual Funds
Explain the Role and Function of AMFI

IV. Legal and Regulatory Framework

Describe Role of Regulators in India
Discuss Role of Securities and Exchange Board of India
Know the Due Diligence Process Followed by AMCs for Distributors of Mutual Funds
Explain Investor Grievance and Redressal Standards (Explain about SCORES)
Understand AMFI Code of Conduct for Intermediaries

V. Scheme Related Information

Understanding the Mandatory Documents and their Purpose, Objective and Significance
Explain the 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 the Modes of Distribution
Understand the Pre-requisites to Become Distributor of the Mutual Fund
Explain Revenue for a Mutual Fund Distributor
Know the Commission Disclosure mandated by SEBI
Explain the Due Diligence Process by AMCs for Distributors of Mutual Funds
Discuss Nomination Facilities to Agents / Distributors and Payment of Commission to Nominee
Explain About Change of Distributor

VII. Net Asset Value, Total Expense Ratio and Pricing of Units

Discuss the Fair Valuation Principles
Compute Net Assets of a Mutual Fund Scheme and NAV
Explain about Dividends & Distributable Reserves
Know about the Concept of Entry and Exit Load and its Impact on NAV
Know about the Key Accounting and Reporting Requirements Applicable to Mutual Funds
Know about the NAV, Total expense ratio and Pricing of units for the Segregated Portfolio

VIII. Taxation

Understand Applicability of various taxes in respect of Mutual Funds
Understand about Capital gains, Capital gains (Long term & Short term) tax and Indexation.
Understand about the Dividend Income and Dividend Income tax
Understand the Difference Between dividend distribution tax and capital gains tax
Understand the basics of Setting off Gains and Losses under Income Tax Act
Understand about Securities Transaction Tax
Understand about Tax benefit under Section 80C of the Income Tax Act for investment pertaining to Mutual Funds
Understand about Tax Deducted at Source (TDS) in Mutual Funds
Understand Applicability of GST in Mutual Funds

IX. Investor Services

Describe the NFO Process
Explain about the New Fund Offer Price /On-going price for subscription
Discuss Different types of investment plans and options
Explain how the mutual fund units are allotted to the investor
Describe the content and periodicity of Statement of Accounts for investments
Describe different types of Mutual Fund Investors
Explain how to fill in the application form for Mutual Funds
Describe the financial transactions with Mutual Funds (Purchase, Redemption and Switches)
Explain Cut-off time and Time Stamping
Describe the KYC requirement for mutual fund investors
Explain the different types of systematic transactions
Explain operational aspects of systematic transactions
Explain Non-Financial Transactions in Mutual Funds
Discuss change in Status of Special Investor Categories
Explain Investor Transactions and turnaround times

X. Risk, Return and Performance of funds

Understand the General and Specific Risk Factors
Explain the Factors that affect mutual fund performance
Describe Drivers of Returns and Risk in mutual fund Scheme
Understand the Measures of Returns
Know about the SEBI norms regarding representation of returns by Mutual Funds in India
Explain risks in fund investing with a focus on investors
Understand the Measures of Risk
Explain certain provisions with respect to Credit Risk

XI. Mutual Fund Scheme Performance

Explain the concept of Benchmarks
Compare the return index and the total return index.
Identify the basics of choosing an appropriate performance benchmark
Describe the use of market benchmarks to evaluate Equity Fund Performance
Describe the use of market benchmarks to evaluate Debt Fund Performance
Describe the use of market benchmarks to evaluate Other Schemes
Explain Quantitative Measures of Fund Manager Performance
Define a tracking error.
Understand the different Sources for disclosure of scheme performance (Scheme documents, AMFI and AMC website and Fund Fact Sheet)

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 of Mutual Funds
Explain Selection of Mutual Fund scheme offered by different AMCs or within the scheme category
Know about selecting options in mutual fund schemes
Know about Do’s and Don’ts while selecting mutual fund schemess

NISM Exam Study Material

Achieving high scores and passing the NISM mutual fund exam on your initial attempt requires thorough preparation and understanding the NISM exam syllabus. To ensure success, it is essential to undertake rigorous study methods. You can utilize resources such as Mutual Fund Mock Tests, NISM Books, and additional materials like news sections. NISM offers study materials upon exam registration to aid candidates in their preparation.

Frequently Asked Questions (FAQs):

What are the Regulations Regarding the Use of Electrical Items Such as Calculators in the NISM Examination?

The use of calculators or any other electronic devices in the NISM examination hall is strictly prohibited.

Is There a Refund Policy if a Candidate Fails the NISM Examination?

No, there is no refund procedure for exam fees in case of candidate failure. However, if the exam is cancelled by NISM, a refund will be issued.

What are the Payment Methods for NISM Certification Fees for Mutual Fund Distributors?

NISM certification course fee can be conveniently paid online using a debit card or net banking. Alternatively, payment can also be made offline through demand drafts.

Can the NISM Exam be Taken in Hindi?

Yes, candidates have the option to take the examination in Hindi. However, for Hindi medium, the exam is conducted offline only.

What is the Significance of the NISM Certificate?

The NISM certificate course is vital for mutual fund distributors to achieve the NISM certificate and obtain the ARN number.