NISM MUTUAL FUND DISTRIBUTION COURSE

I. Concept and Role of a Mutual Fund

• Concept of a mutual fund
• Functions of a mutual fund
• Advantages and limitations of a mutual fund
• Investment objectives
• Marking to market
• Unit capital
• Assets under management (AUM)
• Fund running expenses
• Net asset value (NAV)
• Brief history of mutual funds in India
• Closed end funds and open ended funds
• Categorization of funds by investment objective
• Categorization of funds by investing horizon
• Categorization of funds by asset class
• International funds
• Fund of Funds
• Exchange Traded Funds (ETF)

II. Fund Structure and Constituents

• Structure of mutual funds in India and related regulations
• Role of the sponsor, trustee and Asset Management Company (AMC) and related regulations
• Role of other fund constituents and related regulations

III. Legal and Regulatory Environment

• Role of regulators in India
• Role and functions of SEBI in regulating mutual funds
• Self regulatory organizations
• Role and functions of AMFI
• AMFI Code of Ethics
• Investment restrictions and related regulations
• Investor rights and obligations

IV. Offer Document

• Regulations with respect to drafting and filing of an Offer Document for NFO
• Process of NFO and steps involved in marketing an NFO
• Objectives of information disclosure in an offer document
• Objectives and contents of the Statement of Additional Information (SAI) and related regulations
• Objectives and contents of the Scheme Information Document (SID) and related regulations
• Key Information Memorandum (KIM) and related regulations 

V. Fund Distribution and Sales Practices

• Types of investors and eligibility
• Distribution channels for mutual funds
• Pre-requisites to become a mutual fund distributor
• Key elements of agreement between distributor and a mutual fund
• Sales practices and commission structure
• Types of commissions and transaction charges
• AMFI Code of Conduct
• Process for KYD

VI. Accounting, Valuation and Taxation

• Computation of net assets and NAV
• Announcement of NAV
• Factors affecting the NAV
• Pricing of transactions in a mutual fund
• Time-stamping of transactions
• Charging of expenses
• Key accounting and reporting requirements
• Valuation process carried out by mutual funds
• Applicability of taxes
• Dividend Distribution Tax
• Taxability of dividends and capital gains in the hands of a mutual fund investor
• Applicability of Securities Transactions Tax based on type of transaction and scheme
• Setting off gains and losses under Income Tax Act

VII. Investor Services

• KYC requirements & Demat Account concept
• Process for fresh and additional purchase in a mutual fund
• Additional documentation requirements for institutional investors
• Acceptable payment instruments
• Processes related to redemptions by investors
• Contents and periodicity of Statement of account
• Process for Nomination and Pledge
• Types of Investment options – dividend, growth and dividend re-investment
• Processes related to of systematic investment plans
• Processes related to systematic withdrawals and transfers
• Processes related to other investor services and facilities

 

VIII. Risk, Return and Performance of Funds

• Return on investment
• Calculation of simple, annualized and compounded returns
• Applicability of returns for different types of funds
• SEBI norms for return representation of mutual funds in India
• Factors that may affect mutual fund performance
• Risks in different type of mutual funds
• Classification of mutual funds based on risk
• Process for Benchmarking of performance

IX. Scheme Selection

• Steps in selecting equity funds
• Steps in selecting debt funds
• Steps in evaluating a money market fund and identifying factors impacting their performance
• Steps in evaluating balanced mutual funds and evaluation of factors impacting their performance
• Sources of data to track mutual fund performance

X. Selecting the Right Investment products for Investors

• Classification of assets into physical and financial assets
• Features of physical assets such as gold and real estate
• Features of financial assets

XI. Helping Investors with Financial Planning

• Basics of financial planning
• Financial goals
• Investment horizon
• Objective of financial planning
• Benefits and need for financial planning to the investor
• Life cycle and wealth cycle in financial planning
• Tools to categorize investors’ needs

XII. Recommending Model Portfolios and Financial Plans

• Risk profiling
• Asset allocation and types
• Importance and steps for developing a model portfolio