Mutual Fund — Specialized Investment Fund Distributors

Syllabus and chapter weightage

Weightages are taken from the official syllabus table published in the NISM workbook, so you can see exactly where the marks are.

Every chapter can be read free, no account needed — tap a chapter to open its plain-English Foundation lesson.

Sample questions

5 questions from the chapter tests, one per chapter. Pick your answer before you open the explanation.

1. Question 1 · Chapter 1: Investment Landscape

   What converts a financial objective into a financial goal?

   1. A.Choosing a suitable mutual fund scheme
   2. B.Assigning amounts and timelines to the objective
   3. C.Obtaining the investor's risk profile
   4. D.Deciding the asset allocation
   Show the answer

   Answer: B. Assigning amounts and timelines to the objective

   "In the investment world, the requirements of these four are known as FINANCIAL OBJECTIVES. When we assign AMOUNTS AND TIMELINES to these objectives, we convert these into FINANCIAL GOALS." The distinction matters because an objective cannot be planned against. "I want to educate my daughter well" is sincere and unactionable; "₹1.08 crore in ten years" can be divided by months, matched to an asset class and reviewed annually. The chapter stresses both halves: "Both the timeline and amount are critical for one to be able to plan to achieve the goal." Options (c) and (d) come later in the sequence — risk profiling and asset allocation follow goal-setting, not the other way round, which is the point of the chapter's opening insistence on "Start with Why".

2. Question 2 · Chapter 2: Concept & Role of a Mutual Fund

   Which statement correctly describes what an investor obtains through a mutual fund?

   1. A.A different product that competes with equity shares and debentures
   2. B.Not a different product but a different way of investing — through professional management, portfolio diversification and a regulated vehicle
   3. C.A guaranteed return product managed by professionals
   4. D.Direct ownership of the individual securities in the portfolio
   Show the answer

   Answer: B. Not a different product but a different way of investing — through professional management, portfolio diversification and a regulated vehicle

   "Thus, an investor does NOT GET A DIFFERENT PRODUCT, but gets a DIFFERENT WAY OF INVESTING. The difference lies in the PROFESSIONAL WAY OF INVESTING, PORTFOLIO DIVERSIFICATION, AND A REGULATED VEHICLE." The workbook opens by correcting exactly the misconception in option (a): "the scheme is perceived to be COMPETING with the traditional instruments of investment, viz. equity shares, debentures, bonds. The REALITY is that one invests in these instruments THROUGH a mutual fund scheme." Hence its insistence that "practically, one does not invest IN mutual fund but invest THROUGH mutual funds" — technically incorrect usage that a distributor must understand. Option (c) contradicts a stated limitation: "A mutual fund is NOT A GUARANTEED RETURN PRODUCT", being "a PASS-THROUGH VEHICLE". Option (d) misdescribes the holding — the investor holds units of the scheme, giving proportionate exposure to the portfolio.

3. Question 3 · Chapter 3: Legal Structure of Mutual Funds in India

   Mutual funds are constituted as trusts in India. Who are the beneficiaries of the trust?

   1. A.The employees of the Asset Management Company
   2. B.The mutual fund distributors
   3. C.Unitholders
   4. D.Trustees of the mutual fund
   Show the answer

   Answer: C. Unitholders

   This is the chapter's first sample question. "Every trust has beneficiaries. The beneficiaries, in the case of a mutual fund trust, are THE INVESTORS WHO INVEST IN VARIOUS SCHEMES OF THE MUTUAL FUND, CALLED UNIT-HOLDERS." Trustees hold the trust property for the beneficiaries and are not themselves beneficiaries — which is why Chapter 2 said that "profits or losses... BELONG TO THE INVESTORS OR UNITHOLDERS. NO OTHER ENTITY involved in the mutual fund in any capacity participates in the scheme's profits or losses. They are all paid a FEE OR COMMISSION." The remaining structural facts follow the same logic: the fund is "constituted as Trusts... governed by the INDIAN TRUSTS ACT, 1882", the trust is "created by ONE OR MORE SPONSORS", and its operations are governed by "a TRUST DEED, which is EXECUTED BETWEEN THE SPONSORS AND THE TRUSTEES."

4. Question 4 · Chapter 4: Legal and Regulatory Framework

   Which of the following regulates mutual funds in India?

   1. A.Securities and Exchange Board of India
   2. B.Association of Mutual Funds in India
   3. C.Asset Management Companies
   4. D.Board of Trustees of mutual funds
   Show the answer

   Answer: A. Securities and Exchange Board of India

   The chapter's first sample question. "Securities markets in India are regulated by the SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI). It regulates, among other entities, MUTUAL FUNDS, DEPOSITORIES, CUSTODIANS, REGISTRARS AND TRANSFER AGENTS (RTAs) AND CREDIT RATING AGENCIES in the country." Option (b) was disposed of in Chapter 3: "AMFI is NEITHER A REGULATORY BODY NOR A SELF-REGULATORY ORGANISATION (SRO)" — it is the association of registered AMCs. The AMC manages the schemes and the trustees oversee compliance and protect unitholders, but neither is a regulator. India has four financial sector regulators — RBI for the banking system and money markets, SEBI for securities, IRDAI for insurance and PFRDA for pensions — and "these regulators come under the purview of the MINISTRY OF FINANCE."

5. Question 5 · Chapter 5: Scheme Related Information

   "Please read the scheme related documents carefully" — which documents does this line refer to?

   1. A.Scheme Information Document and audited balance sheet of the Asset Management Company
   2. B.Trust deed and Key Information Memorandum
   3. C.Statement of Additional Information and fund fact sheet
   4. D.Scheme Information Document and Statement of Additional Information
   Show the answer

   Answer: D. Scheme Information Document and Statement of Additional Information

   The chapter's first sample question. "There are primarily TWO IMPORTANT DOCUMENTS for understanding about the mutual fund scheme: (a) SCHEME INFORMATION DOCUMENT (SID), which has details of the PARTICULAR SCHEME, (b) STATEMENT OF ADDITIONAL INFORMATION (SAI), which has STATUTORY INFORMATION about the mutual fund or AMC, that is offering the scheme." The fund factsheet in option (c) is expressly non-statutory — "it is NOT A REGULATORY REQUIREMENT to publish the monthly fact sheet" — and the trust deed in option (b), while a document unitholders may inspect under Chapter 4, is not a scheme related document. Note the legal nicety the workbook adds: "a SINGLE SAI is relevant for ALL the schemes offered by a mutual fund. In practice, SID and SAI are two separate documents, though the LEGAL TECHNICALITY is that SAI IS PART OF THE SID." The third mandatory document is the KIM, a summary of both.

Frequently asked questions

What is the passing mark for NISM Series V-D?

You need 60% to pass NISM-Series-V-D: Mutual Fund — Specialized Investment Fund Distributors. On a 150-mark paper that is 90 marks.

Is there negative marking in NISM Series V-D?

There is negative marking of 10% of the marks for that question, so a wrong answer costs you 0.10 marks on a 1-mark question. Guess only when you can eliminate at least two options.

How long is the NISM Series V-D exam?

The exam runs for 180 minutes and carries 150 marks in total.

How long is the NISM Series V-D certificate valid?

NISM certifications are generally valid for 3 years from the date of passing, after which they must be renewed. Confirm the current position on nism.ac.in before your certificate lapses.