NISM Exam preparation

1. Dr. Ankit Jain 1

2.  Indian mutual funds are supervised and regulated by
the SEBI (Mutual Fund) Regulation 1996.
 SEBI provides various amendments and circulars from
time to time.
 SEBI was set up by SEBI act 1992.
 Anyone who is aggrieved by a ruling of SEBI, can file
an appeal with the Securities Appellate Tribunal
(SAT).
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3.  RBI regulate banks in India.
 Banks can act as sponsors, custodian, bankers,
and distributors of Mutual Fund.
 Bank sponsored MF regulated by both RBI and SEBI
jointly.
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4.  Self Regulatory Organizations are organization whose
prime responsibility is to regulate their own members.
 The Institute of Chartered Accountants of India (ICAI)
regulates its own members.
 Mutual Funds in India have not constituted any SRO
for themselves. Therefore, they are directly regulated
by SEBI.
 BSE and NSE are SRO who regulate the firm listed on
stock exchange and also their trading members.
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5.  AMFI is industry association of MF industry.
 AMFI was established in 1993.
 It is not Self Regulated Organization (SRO).
 To recommends best business practices and code of
conduct for members.
 AMFI represents the industry to regulators and policy
makers in SEBI, RBI and the government.
 To conducts investor awareness programme.
 Disseminates information.
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6.  Distributor is register by a AMC only after registration
with AMFI.
 After getting register Distributor get ARN number.
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7.  The AMFI Code of Ethics sets out the standards of
good practices to be followed by the Asset
Management Companies in their operations and in their
dealings with investors, intermediaries and the
public.
 SEBI (Mutual Funds) Regulation, 1996 requires all
Asset Management Companies and Trustees to abide
by the Code of Conduct as specified in the Fifth
Schedule to the Regulation.
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8.  AMFI has also framed a set of guidelines and code of
conduct for intermediaries (known as AGNI),
consisting of individual agents, brokers, distribution
houses and banks engaged in selling of mutual fund
products.
 SEBI has made it mandatory for distributors to follow
the code.
 AMFI is authorized by SEBI to seek explanation, issue
warnings, or cancel the registration.
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9.  NAV and Sale and Purchase prices disclosed on AMFI
website by 9PM every business day.
 FOF can publish their NAV by 10 AM of the next
business day.
 Detailed Portfolio disclosure in the prescribed format
every 6 months published in english and regional news
paper.
 Summarized portfolio disclosure to unit holders every
month fact sheet.( Voluntary Industry Practice)
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10.  Key document may be inspect by investor such as
annual report, Trust deed, Investment management
agreement, Custodial service agreement, R&T Agent
Agreement and Memorandum and Article of
Associations of the AMC.
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11. SEBI set service standard time as follows:
 Delay in dispatching dividend warrants or redemption
proceeds. ( Redemption period is 10 days and Dividend
warrants 30 days)
 Penalty is charge @ 15% per annum.
 Systematic investors can make a special request for
statement of account (within 10 days)
 Dormant Investors must receive a statement of account
once a year.
 Soft copy of statement of account may be sent to investors
every month.
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12.  Allotment of Units in a NFO (other than ELSS) is 5
days from NFO closing date.
 Allotment of units in a ELSS NFO is 30 days from
NFO closing date.
 On going mutual fund statement is 10 days from
transaction request.
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13.  Change in Fundamental Attributes: Right to take
information and option is given to investors to exit without
exit load before the implementation of change.
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14.  Investors cannot sue the Trust.
 Investors can sue against trustees.
 No recourse of Ignorance.
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15.  Change of Broker ( Letter to the Mutual Fund
indicating change of ARN)
 Nomination ( Max. 3 Nominee)
 Nomination can be done in Individual case.
 Unit Certificate (Provided on request within 30 days.)
 Demat Holding (Mutual fund can purchase through
stock exchange.
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