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