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NISM Mutual Fund Module

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Importance of this session.

Mutual fund is an important financial product. Learning will help us sell this product in a better way. NISM certification is a must for Financial planners, who need to sell Mutual Funds. Exam consists of 100 Questions, each carrying one mark. Negative mark 0.25% Pass 50% Duration 2 hrs

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Concept & Role of a Mutual Fund

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Mutual Fund
A Mutual Fund is a trust that pools the savings of a number of investors who share a common financial goal. The money thus collected is then invested in capital market instruments such as shares, debentures and other securities. The income earned through these investments and the capital appreciation realized is shared by its unit holders in proportion to the number of units owned by them. Investors are Beneficial Owners of MF. A MF Invests in Marketable Securities.

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Mutual Fund Operation Flow Chart

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Advantages of Mutual Funds to Investors

Portfolio Diversification Professional management Reduction in risk Reduction in transaction cost (Economies of Scale) Liquidity Highly Liquid than Shares. Convenience and flexibility Tax benefits

Drawbacks of Mutual Funds Selecting a Scheme from over 800 Schemes Choice Overload No tailor-made portfolios or lack of portfolio customization

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Types of Funds

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Open Ended & Close Ended Funds

Open ended funds
Open ended funds are ones that sell & repurchase units at all times. Units are Issued and Redeemed by AMC Repurchase Surrender of Units. Also called as Redemption

Close ended funds

Close ended funds are one that make a one time sale of units. After the NFO CEFs do not let the investors buy directly from the fund. To provide liquidity to the investors, 1. these funds are traded in the stock markets as per Listing Agreement with Exchange 2. Interval Scheme Combination of Closed and Open Ended. Open during an Interval. The unit capital of the scheme remains stable

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Based on Schemes / Investment Philosophy

Equity Schemes
High Risk High returns Invests minimum 65% of Corpus in Indian Equity

Debt Mutual Funds

Risk is low. Alternative to Post office and Bank Deposits. GILT Fund, Money Market Fund, Income, Medium/Short term funds.

Balanced Schemes
Invests in both Equity and Debt. Equity Oriented and Debt Oriented Balanced Funds are available. MIP, Pension Plan, Children's Plan are Debt oriented Balanced Funds.

By nature of investment objective

Growth funds invest for medium to long term capital appreciation. Value funds invest in equities that are currently under valued, & whose value might be unlocked in future.
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Types of Equity Schemes

Diversified Equity Invest Across Sectors & Across Companies Sector Funds /Thematic Funds
Invests only in a Particular Sector (Reliance Banking) Invest based on a theme (Reliance Infrastructure Fund) Carry the highest level of risk

ELSS Schemes (Equity Linked Saving Schemes)

Sec 80C benefit upto Rs 1 Lakh. Min Rs 500/-. Max No limit. Dividends and Maturity are Tax Free Lockin Period of 3 yrs.

Equity Income or Dividend Yield Schemes

Invests in High Dividend Yield Companies Share Prices of such companies Fluctuate less and hence the NAV of such schemes. Example : UTI Dividend Yield Fund

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Types of Equity Schemes

Arbitrage Funds
Take Contrary Positions in different markets Ex: Buying a Share in NSE & Selling the same in BSE Invest in Futures and Options (Derivatives)

Index Funds or Passive Funds

Follows Passive Style of Investment. Low Cost. Invests in Underlying Index Stocks as per the Weightage. Fund Manager has no role in deciding on investments. These funds are not designed to Outperform the Index Low Running Cost. Performance tends to mirror the particular index. Tracking Error Index return Index Fund return

Active Funds
Fund Manager has an active role in Investment decision Designed to Outperform the Market High Running Cost

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Types of Debt Schemes

Diversified Debt Funds or Income Funds
Invest to generate regular income, rather than capital appreciation. Invest in all the type of Debt Securities (both Gov bonds & Pvt Co Debentures)

Gilt Funds
Invests in Gov Sec & T-Bills. No Credit / Default risk as issued by government. Dated Securities Gov Securities with Maturity Period greater than a year. T-Bills or Treasury Bills are G-Sec with less than one year maturity.

Fixed Maturity Plan / Fixed Term Plan.

A Closed End Debt Scheme investing in Predefined Investments. Try to achieve the indicative Yield. Invests in Sec that Matures along with the term of the Plan. Alternative to Bank FD fund manager has little ongoing role in deciding on the investment options

Floating Rate Funds

Invest in Floating Rate Debt Securities The NAVs of such schemes fluctuate lesser than debt funds that invest more in debt securities offering a fixed rate of interest.
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Types of Debt Schemes

Junk Bond Schemes or High Yield Bond Schemes
Invest in Companies that are of poor credit quality. Invest in Debentures of High Coupon rates. Risky avenue

Money Market or liquid funds.

Money Market is a place for short term borrowing and lending. Used for Working Capital Requirement. Call Money/Notice Money,T-Bills, Certificate of Deposits issued by SCB, Commercial Paper issued by Corporate etc. are money market instruments. Safest of all MF investments. Invest mainly in securities of short term (less than 91 days of maturity) Highly Liquid. Invests in Money Market Securities Reliance Liquid Fund Treasury Plan

FOF Fund Of Fund Invest in other Mutual Fund Schemes.

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Types of Hybrid / Balanced Schemes

Monthly Income Plan (not a guaranteed plan)
seeks to declare a dividend every month though not guaranteed. Mostly 80% in Debt and 20% in Equity Flexible Asset Allocation for fund manager Ex : Reliance Monthly Income Plan

Capital Protected Schemes

Closed End Schemes - ensure that investors get their principal back invest in Zero Coupon G-Sec which mature along with the scheme Invests some portion in Equity to give better returns. Capital Protection Oriented Schemes Instead of Investing in Zero Coupon GSec, they generally invest in Good Quality Debentures. Capital Protection can also be offered by a Guarantor.

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Miscellaneous Schemes
ETF Exchange Traded Funds
Open Ended Funds Market Maker offers Buy and Sell Quote (Provides Liquidity) Traded in Stock Exchange Nifty Bees, Liquid Bees etc are Examples

Gold Funds
GOLD ETF invests in Physical Gold GOLD Sector Funds Invests in the fund will invest in shares of companies engaged in gold mining and processing - NAV of these funds do not closely mirror gold prices

Real Estate Funds Commodity Funds

Invest in Commodities. Commodity ETF are not available in INIDA Commodity Sector Funds are available SBI Magnum Comma

International Funds
Collects money in India (Feeder Fund) Invests money in Foreign Mutual Fund Schemes (Host Funds)

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R i s k R e t u r n M a t r i x
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Charges

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Charges
Entry Load
Difference between the Sale Price and NAV is called ENTRY LOAD W.e.f Aug 2009, ENTRY Load has been banned

Exit Load
Difference between NAV and Repurchase Price. Called as Contingent Deferred Sales Charge (CDSC) Varies with Holding period of investors. Longer the holding period lower the CDSC. Exit loads/ CDSC in excess of 1% have to be credited back to the scheme Needs to be same for all Unit Holders of a scheme.

Initial Issue Expenses Deferred Load

Expenses incurred during launch of fund. Initial expenses should not exceed 6% of the Corpus raised during the NFO. AMCs need to bear the initial issue expenses now. So, deferred load is not applicable for newer schemes.

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Investment Management / Asset Management /Fund Management Fee

A fee charged for managing Investors funds. It is the business revenue of a MF. Cannot be charged for funds parked in Short Term Deposits of Commercial banks by Liquid Funds / Debt Funds. Cannot be charged for AMCs own investment in a scheme

Recurring expenses - Expenses for an On going fund.

Fees of various service providers, such as Trustees, AMC, Registrar & Transfer Agents, Custodian, & Auditor Selling expenses including scheme advertising & commission to the distributors Expenses on investor communication, account statements, dividend / redemption cheques / warrants Listing fees and Depository fees, Service tax etc.

Expenses that cannot be charged to the schemes

Penalties, Interest on delayed payment to Unit Holders Legal,Marketing,Publication & other expenses not attributable to any scheme

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Expenses on General Management, General administration etc Software development expenses, depreciation on fixed assets Other expenses prohibited by SEBI from time to time.

Recurring Expenses Limits Limit on Expenses Net assets First 100 crores next 300 crores next 300 crores >700 crores Equity fund Other than Equity % of charge 2.25% 2.00% 1.75% 1.50%

2.50% 2.25% 2.00% 1.75%

For FOF the total expenses should not exceed 0.75% Recurring Expenses includes Fund Management Fee also Maximum Expenses

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Rapid Fire The number of mutual fund schemes in India is about:

100 800 2000

Open-ended schemes offer exit option through a stock exchange

True False

Sector funds invest in a diverse range of sectors

True False

High yield bond schemes invest in junk bonds

True False

Investment objective is closely linked to

Scheme Option Plan
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Rapid Fire
A close-ended mutual fund has a fixed NAV Unit Capital Rate of Return An open ended Mutual fund is one that has An option to invest in any kind of security Units available for sales and purchase at all times An upper limit on its NAV A fixed fund size _________ was the year SEBI Regulations for Mutual Funds was formulated. 1992 1993 1996 An investor in need of regular income should not select A bank deposit a debt fund an equity growth fund
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Debt Funds target Low risk and stable income Protection of principle Low growth with risk Long term capital appreciation Excess distribution expenses are to be borne by the AMC Unit holders SEBI AMFI Which of the following is not a benefit from a Mutual Fund? Investor is able to diversify risk Investor has custody of securities where fund invests Investor can save costs Professional Management of money

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An investor asks you in what order he should list the following schemes, going from the scheme with the least risk to the one with the highest risk. 1. A Balanced Fund, 2. A Stock Index Fund 3. A liquid/ Money Fund, 4. A Pharma sector fund 1,2,3,4 3,1,2,4 2,3,1,4 Charge to an investor at the time he redeems his units from the fund is known as Repurchase load. Redemption weight. Exit load. Contingent Deferred Sales Charge (CDSC). is higher for investors who stay invested in the scheme longer is lower for investors who stay invested in the scheme longer. Is the same for all investors irrespective of how long they stay invested. Is not allowed to be charged to mutual fund investors in India.
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Fund Structure & Constituents

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Constituents of a Mutual Fund

Sponsor Trustees Asset Management Company Custodian R & T Agent Distributors Bankers MF in India is a 3-Tier Structure consisting of Sponsor, Trustee and AMC.

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Sponsor
He is the promoter of a MF and gets the fund registered with SEBI. A sponsor will form a trust & appoint a board of trustees with SEBI approval. minimum 40% share holding in the capital of the AMC Financial Services Business for past 5 years prior to the registration. Positive net worth in last 5 yrs. Profit making in 3 out of last 5 yrs including 5th Year.

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Mutual funds as a Trust

Mutual fund is a pass though vehicle. MF in India Trust form. Investors or unit holders are beneficial owners of the investments held by the trust. Trust is the registered owner. Acts as protector of unit holders money. Appoint AMC for managing funds. Min 4 Trustees. 2/3rd Trustees must be independent. Signs Trust deed with SPONSOR

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Asset Management Company

Acts as an investment manager of the trust. Its a Pvt Ltd. Co. Net worth of Rs. 10 crores at all times. 50% of directors on the AMC board are independent. An AMC cannot invest in its own schemes, unless the intention to invest is disclosed in the Offer Document The appointment of an AMC can be terminated by a majority of the trustees, or by 75% of the Unit-holders (Subject to SEBI Approval) Prior Approval of Trustee is required for appointing Board of Directors of AMC
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Custodian & Depositories.

A custodian has custody of the assets of the fund & is appointed by the board of trustees custodian needs to accept & give delivery of securities for the purchase and sale transactions of the various schemes of the fund Clearing & Settlement Sponsor & Custodian cant be the same. Custodian must be Independent The SEBI regulations provide that if the sponsor or its associates control 50% or more of the shares of a custodian, or if 50% or more of the directors of a custodian represent the interest of the sponsor or its associates, then that custodian cannot be appointed for the mutual fund operation Have to be registered with SEBI

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Auditors
Scheme Auditor & AMC Auditor are different Scheme Auditor appointed by Trustee, AMC auditor by AMC.

Registrars & transfer agents - RTA.

RTA appointed by AMC maintains investors records. Investor Service Centres (ISCs), which perform a useful role in handling the documentation of investors are offices of R&T. It is not compulsory to appoint a RTA. The AMC can choose to handle this activity in-house (Franklin)

Fund Accountants
performs the role of calculating the NAV by collecting information about the assets and liabilities of each scheme The AMC can either handle this activity in-house, or engage a service provider
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Rapid Fire
The assets of the mutual fund are held by
AMC Trustees Custodian Registrar

AMC directors are appointed with the permission of Trustees

True False

Most investor service centres are offices of

Trustees Registrar Fund Accountant Custodian

Fund accounting activity of a scheme is to be compulsorily outsourced

True False
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Rapid Fire
The custodian of a mutual fund Has custody of assets and is appointed by Trustees need not be an entity independent of the sponsors does not give or receive deliveries of physical securities Issuing and redeeming units of mutual fund is the role of the custodian the transfer agent the trustees the bankers The accounts and all other records of an AMC are filed with AMFI Registrar of Companies Agents Association UTI

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The Board of Trustees of a mutual fund Act as protector of investors interests Directly manage the portfolio of securities Do not have the right to dismiss the AMC Cannot supervise and direct the working of the AMC The AMC and directors are answerable to Stock Exchanges The Board of Trustees Agents and distributors Stock Brokers Transfer Agents of mutual fund are not responsible for issuing and redeeming units of the mutual fund updating investor records preparing transfer documents investing the funds in securities markets

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Who needs to sign the Trust Deed with the Trustee? AMC SEBI Investor SPONSOR Under the Indian Trust Act the interest of Unit Holders is safeguarded by A board of trustees A trustee company Either A or B SPONSOR The AMC shall make investment decisions solely in the interest of SPONSOR Trustee Unit Holders Employees of AMC

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Legal & regulatory environment

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SEBI (Securities & exchange board of India)

The APEX regulator of capital market. Formed in 1992. All MF constituents are registered with SEBI.

Self regulatory organizations

Prime responsibility is to regulate their own members. The statutory regulatory bodies - lay down the broad policy framework, and leave the micro regulation to the SRO No SRO for Mutual Fund Industry. MF Industry directly regulated by SEBI AMFI is not a self regulatory organization. BSE & NSE, Institute of Chartered Accountants (ICAI) are examples

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Investor Rights & obligation

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Investor rights
If 75% Unit Holders decide. Scheme can be winded up. AMC can be dismissed / terminated Schemes except ELSS, need to allot units or refund moneys within 5 business days of closure of the NFO. Open-ended schemes, Except ELSS, to re-open for ongoing sale / re-purchase within 5 business days of allotment Right to Receive dividend with in 30 days of declaration. Nominees -up to 3.The investor can also specify the percentage distribution between the nominees. The investor can also pledge the units. Redemption proceeds with in 10 days or AMC to pay penalty of 15% PA.

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Investor rights Dispatch of Statement of Account

In the case of NFO - within 5 business days of allotment of Units. Post-NFO investment within 10 working days of the investment In the case of SIP / STP / SWP Initial transaction within 10 working days Ongoing Within 10 working days of the end of every quarter On specific request , SOA dispatched to him within 5 working days SOA to dormant investors (no transaction during the previous 6 months can be sent along with the Portfolio Statement / Annual Return. If mandated by the investor, soft copy to be mailed to investor every month. NAV has to be published daily, in at least 2 newspapers NAV is to be updated in the website of AMFI and the mutual fund In the case of Fund of Funds, by 10 am the following day In the case of other schemes, by 9 pm the same day In case of Closed End Schemes NAV calculated every Wednesday

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Investor rights
Investor can ask for a Unit Certificate. It is different from a SOA SOA shows the opening balance, transactions during the period and closing balance A Unit Certificate only mentions the number of Units held by the investor. SOA is like a bank pass book, while the Unit Certificate is like a Balance Confirmation Certificate issued by the bank. Unit Certificates are non-transferable & do not offer any real transactional convenience. On request, the AMC is bound to issue the Unit Certificate within 30 days of receipt of request.

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Rapid Fire
SEBI regulates
Mutual Funds Depositories Registrar & Transfer Agents All the above

Statement of Account is to be sent to investors within ___ days of NFO closure

3 5 7 15

Within ___ days of dividend declaration, warrants will have to be sent to investors
30 10 15

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Rapid Fire
Unit Holder can hold his unit in DEMAT form
True False

If a unit-holder does not agree to the merger of his fund with another, he has no exit option
True False.

The structure which is required to be followed by mutual funds in India is laid down by
Financial Ministry Securities & Exchange Board of India (SEBI) Fund Sponsor Association of Mutual Funds of India (AMFI)

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The role of AMFI in the mutual funds industry is not to

promote the interests of the unit holders set a Code of Ethics regulate mutual funds. Increase public awareness of mutual funds in the country.

A Self Regulatory Organization can regulate

all entities in the market only its own members in a limited way its own members with total jurisdiction no entry at all

The amount of authority enjoyed by a self regulatory organization is defined by

the apex regulatory authority company law board its own members RBI

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Which of the following qualifies as a self regulatory organization?

SEBI RBI AMFI NSE

The Sponsor of a fund can act as its custodian if it has the required experience and SEBI registration
True False

In order to ensure independence, the Compliance Officer reports directly to the head of the AMC and works closely with the Trustees on various compliance and regulatory issues
True False

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Offer Document

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Offer Document
Offer document: - Called as Prospectus/Legal or Reference Document. Contains all the necessary information that a prospective investor ought to know before investing. Investors are mandated to read the OD. OD is filed with SEBI. Investment is governed by the principle of caveat emptor i.e. let the buyer beware NFOs other than ELSS can remain open for a maximum of 15 days. Open-ended schemes have to re-open for sale / re-purchase within 5 business days of the allotment

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Offer Document
OD has two parts Scheme Information Document (SID) has details of the scheme Draft SID is available for viewing in SEBI website for 21 working days. Final SID is hosted on AMFI site 2 days before the issue opens. Statement of Additional Information (SAI) has statutory information about the Mutual Fund offering the scheme Single SAI is relevant for all the schemes offered by a Mutual Fund SAI is part of SID. SID should be read in conjunction with the SAI and not in Isolation

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Contents of SID
Summary information Cover Page
Name of the Mutual Fund Name of Scheme Type of the scheme (Equity / Debt, Open / Closed etc) Price of the Units Opening, closing and earliest closing date for the offer. Disclaimer clause by SEBI Name of guarantor in case of assured return scheme.

SAI Contains the following details for the past 3 years.

Financial Summary of Sponsor Condensed Financial Information of All Schemes. Associate Transactions if any. Investor grievance summary report.

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Risk Factors Standard Risk Factor Mutual funds and securities investments are subject to market risks and there is no assurance or guarantee that the objectives of the mutual fund will be achieved. As with any investments in securities, the Net asset Value (NAV) of the units of the schemes can go up as well as down depending on the factors and forces affecting securities markets. Past performance of the sponsor / the Asset Management Company / Mutual Fund does not indicate the future performance of the schemes of the mutual fund. The names of the respective schemes do not in any manner indicate either the quality of the scheme, or their future prospects and returns.

Investors are not being offered any guaranteed / assured returns

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Scheme Specific Risk factors Risk due to Investment Philosophy / Liquidity / Redemption etc. Schemes investing in Equities Schemes investing in Bonds Risks associated with Investing in Foreign Securities Risks associated with Investing in Derivatives Risks associated with Investing in Securitized Debt Risks associated with Short Selling and Securities Lending Risk due to Non Diversification. Fundamental Attributes of the Scheme Investment Objective / Investment Pattern/Asset Allocation Pattern Type of the scheme Aggregate fees & Expenses Liquidity provisions such as listing, repurchase etc Guarantee if any Options like Growth,Div etc

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Is Offer Document Verified by SEBI for its Accuracy ? NO OD is Vetted by SEBI though SEBI doesn't formally APPROVE them DUE DILIGENCE CERTIFICATE (Legal & Regulatory Compliance) Issued by Compliance Officer / CEO / MD/WHOLE TIME DIRECTOR/EXECUTIVE DIRECTOR appointed by AMC The draft OD forwarded to SEBI is in accordance with SEBI Regulations All legal requirements connected with launching of the scheme have been complied with. Disclosures made in the OD are TRUE, FAIR & ADEQUATE to enable the investors to make a well informed decision regarding investment. The intermediaries named in the OD are registered with SEBI and their registration till date is valid. OD without DUE DILIGENCE Certificate will be rejected by SEBI.

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KIM Key Information Memorandum (Abridged Version of OD).

Fundamental Attributes, Plans and Options under the scheme Details about Fund Manager, Trustee Company, AMC Performance of the scheme and Benchmark Index in CAGR Source for obtaining daily NAV, Investor grievance Contact Information about obtaining Account Statement, Annual Financial Results, Half Yearly Portfolio etc. Dates of Offer, Risk Profile of the scheme, Dividend Policy KIM UPDATED ONCE IN A YEAR KIM revised in case of change in Fundamental Attributes. Other changes are disclosed through an Addendum Lending & Borrowing by MF No lending. Borrowing only to meet Redemption / Liquidity needs. Borrowing limited to 20% of Net Assets for a Max Period of 6 months. Borrowed amount cant be invested.

Minimum No of Investors in a Scheme 20. No single investor should hold more than 25% of Net Assets of a scheme.
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Updation of SID Regular Updation

If a scheme is launched in the first 6 months of FISCAL, then the first Update is due with in 3 months of the end of Financial Year. If a scheme is launched in the second half of the FISCAL, then the first update is due within 3 months of the end of the next financial year. Thereafter SID is to be updated once in a YEAR

Updation of SID Need Based

Reconstitution of AMC Change of Fundamental Attributes Change in Key Personnel of the AMC especially the Fund Manager Fresh Litigation cases or Adjudication proceedings against AMC/Sponsor.

SAI updated by the end of 3 months of every Financial Year

Eligibility to Invest in Mutual Funds All except Foreign Citizens & OCB PIO (Person of Indian Origin) can invest Overseas Corporate Body (OCB) means a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of at least 60% by NRIs.
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PIO and OCB

A Person of Indian Origin (PIO) is usually a person of Indian origin who is not a citizen of India Person of Indian Origin Card (PIO Card) is a form of identification issued to a Person of Indian Origin who hold a passport in another country other than Pakistan and Bangladesh. Other conditions are:
person at any time held an Indian passport or; person's parents or grand parents or great grand parents were born in and permanent residents in India, but not moved to Pakistan and Bangladesh or; person is spouse of a citizen of India or a person of Indian origin as per above. It came into force with effect from 15 September 2002.

Overseas Corporate Body (OCB) means a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of at least 60% by NRIs.

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Sales Practices
SEBI does not prescribe any limit of commission payable to distributors by the fund house. 2 types of commissions
Upfront commission for mobilization of funds paid by Investors directly Trail commission to encourage the retention of the investors. Trail commission is paid Quarterly on Average Net Assets. Trail Commission increases when the market value of investment increases.

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Rapid Fire
NFOs other than ELSS can be open for a maximum of
7 days 10 days 15 days 30 days

Legally, SAI is part of the SID

TRUE FALSE

Offer documents of mutual fund schemes are approved by SEBI

TRUE FALSE

Application form is attached to

SID SAI KIM

KIM has to be updated every 6 months

True False
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Rapid Fire
The front page of an offer document need not cover
opening, closing and earliest closing date of the offer. Disclaimer clause Legal and regulator compliance Price of units

Though the offer document of a scheme is prepared as per SEBI Regulations and is filed with SEBI. SEBI does not certify the accuracy or adequacy of the document.
True False.

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What document Mutual Fund distributors need to refer for finding out eligible category of investors in a particular Mutual Fund Scheme?
SEBI Regulations Manual AMFI booklet Offer document RBI Guidelines

Most eligible investors of Mutual Funds can broadly be grouped into either individual or institutional investors
True False

The front Page of the offer document contains

SEBI Disclaimer Clause Name and Type of the fund Major Objectives of the Fund A&B

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The Board of Trustees of a mutual fund

Act as protector of investors interests Directly manage the portfolio of securities Do not have the right to dismiss the AMC Cannot supervise and direct the working of the AMC

The legal responsibility for the accuracy of the statements made in the offer document lies with
SEBI The AMC AMFI The Company Law Board

The rights of investors in a mutual Fund scheme are laid down in

the Offer Document of that scheme Quarterly Reports Annual reports Marketing Brochures

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The first time investor would be well advised to refer to

KIM Offer Document Either of the Above

Validate the statement - The investor is not obligated to read the offer document before investing in Mutual Funds
Completely True Completely False Rarely True Partly False

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Session 5 Accounting, Valuation & Taxation

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NET ASSET VALUE - NAV

The unit-holders funds in the scheme is commonly referred to as net assets. NAV = (Market value of investments + Assets Liabilities) /(no of units outstanding) Higher the interest, dividend & capital gains earned by the scheme, higher would be NAV. Higher the appreciation in the investment portfolio, higher would be the NAV. Lower the expenses, higher would be the NAV. The process of valuing each security in the investment portfolio of the scheme at its market value is called mark to market MF Investments are Marked to Market.

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NET ASSET VALUE - NAV

Example : Investors have bought units of a mutual fund scheme during NFO. The scheme has thus mobilized Rs 200 crore. An amount of Rs 140 crore, invested in equities, has appreciated by 10%. The balance amount of Rs 60 crore, mobilized from investors, was placed in bank deposits. Interest and dividend received by the scheme is Rs 8 crore, scheme expenses paid is Rs 4 crore, while a further expense of Rs 1 crore is payable. Calculate NAV of the scheme ?

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Collected by www.BankExamsToday.com

Dividends & Distributable Reserves

SEBI guidelines stipulate that dividends can be paid out of distributable reserves. All the profits earned (based on accrual of income & expenses as detailed above) are treated as available for distribution. Valuation gains are ignored. But valuation losses need to be adjusted against the profits. That portion of sale price on new units, which is attributable to valuation gains, is not available as a distributable reserve Each scheme has separate Balance Sheet and profit and loss account.

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Collected by www.BankExamsToday.com

Key Accounting & Reporting Requirements

Accounts of the schemes need to be maintained distinct from the accounts of the AMC. NAV rounded off to 4 decimals Liquid Schemes, Index Funds & Debt Schemes NAV rounded off to 2 decimals Equity and Balanced or Hybrid Schemes Investors can hold their units even in a fraction of 1 unit The day on which valuation is done is known as Valuation day. The last quoted price of the Security is taken from Stock Exchange where it is Principally Traded. Debt sec not traded on the valuation date are valued on the basis of the Yield matrix. Yield matrix estimates the yield for different debt securities based on the credit rating of the security and its maturity profile If an Illiquid Sec accounts for more than 5% of Net Assets, then it has to be valued by Independent Valuer.

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TAXATION
STT Securities Transaction Tax - tax on the value of transactions in equity shares, derivatives and equity mutual fund units STT is not payable on transactions in debt or debt-oriented mutual fund units

Product Equity-Delivery & for Exchange Traded Equity Funds

Transaction Purchase Sell Sell Sell

STT rate 0.125% 0.125% 0.017% 0.25%

Sale of Futures and Options Equity MF Repurchase

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Dividend Distribution Tax

Dividends are Tax Free at the Hands of Investors.

Dividend Distribution Tax Equity schemes Debt schemes

Individuals/HUF Nil 14.163%

Corporates Nil 22.66%

(20% + 10% + 3%)

(Tax + Surcharge + Cess) (12.5% + 10% + 3%)

Money market and Liquid schemes

28.325%

28.325%
(25% + 10% + 3%)

(Tax + Surcharge + Cess) (25% + 10% + 3%)

Dividend Stripping Norms

Section 94(7) disallows any capital loss, arising to a unit holder if, an investor buys units within 3 months prior to the record date for a dividend, and sells those units within 9 months after the record date, any capital loss from the transaction would not be allowed to be set off against other capital gains of the investor, up to the value of the dividend income exempted.
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Capital Gains Tax

Capital Gain is the difference between sale price and acquisition cost Long Term Capital Gain (LTCG) : Gains arising from Sale of Units held for > 12 months Short Term Capital Gain (STCG): Gains arising from Sale of Units held for <=12 months

Long Term Capital Gain Tax

Equity Schemes NIL. Where STT is not paid, the taxation is similar to debtoriented schemes Debt Schemes Lesser of 10% without indexation or 20% with indexation Indexation means that the cost of acquisition is adjusted upwards to reflect the impact of inflation

Short Term Capital Gain Tax

Equity Schemes 15 % Debt Schemes Added to total income and taxed as per the slab

No TDS on the dividend distribution or re-purchase proceeds to resident investors

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Collected by www.BankExamsToday.com

Setting off Gains and Losses under Income Tax Act

Capital loss, short term or long term, cannot be set off against any other head of income (e.g. salaries) Mutual Fund Investments are Exempted from Wealth Tax

Loss Short Term

Set Off Against Long Term / Short Term Gain

Long Term (Debt) Long Term Gain (Debt) Long Term Equity Cannot be Set Off

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Rapid Fire
Net assets of a scheme is nothing but its investment portfolio True False The difference between NAV and re-purchase price is Entry Load Exit Load Expense NAV of income funds is to be calculated upto ___ decimals 4 3 2 1 Securities Transaction Tax is applicable to Debt Schemes
True False

Wealth tax is payable at the applicable rates on equity mutual fund units True False
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Risk Measures

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Collected by www.BankExamsToday.com

Mutual funds Return Disclosure Norms

Only SEBI Prescribed methods for computing returns. Dividends declared shall be mentioned in rupees per unit & the prevailing NAV Returns for the Past 1,3, 5 years & since inception in CAGR should be disclosed. The returns of the Benchmark shall also be disclosed for the corresponding period. For funds less than 1 year, absolute returns must be shown & not annualized. All advertisements must display `past performance may or may not be sustained in future` Ranking of the fund must be appropriately explained.

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Fundamental Analysis
Fundamental Analysis entails review of the companys fundamentals viz. financial statements, quality of management, competitive position in its product / service Earnings per Share (EPS): Net profit after tax No. of equity shares outstanding Tells investors how much profit the company earned for each equity share Price to Earnings Ratio (P/E Ratio): Market Price EPS indicates how much investors are prepared to pay , in relation to the companys earnings (Future Earning Potential) normally calculated based on forward EPS P/E may be high because the companys prospects are indeed good Book Value per Share: Net Worth No. of equity shares indicator of how much each share is worth Price to Book Value: Market Price Book Value per Share indicator of how much the share market is prepared to pay for each share of the company, as compared to its book value

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Technical Analysis & Portfolio Building

Technical Analysts (Chartists) study price-volume charts Price behavior & volumes traded are a reflection of investor sentiment long term investment decisions are taken through fundamental analysis Comes in handy for short term speculative decisions like intra-day trading When a fundamental analysis-based decision has been taken on a stock, technical analysis might help decide when to implement the decision i.e. the timing Portfolio building approach Top down and Bottom up
Top down approach - sector allocation is a key decision good stocks within the identified sectors are selected for investment Bottom-up approach - Stock selection is the key decision in this approach sector allocation is a result of the stock selection decisions The approach is therefore also called stock picking

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Risks in Mutual Fund Investing

Risk in a generic sense means the possibility of financial loss In the investment world possibility of financial loss arises from variability of earnings from time to time. Risk is thus equated with volatility of earnings - a statistically measurable concept. Volatility of earnings of an equity fund comes from
Degree of diversification Fund managers success at market timings Company Specific Risk or Non Systematic Risk Can be diversified Sector Specific Risk Market Level or Systematic Risk - Not diversifiable, not controllable because of changes due to broad economic, political and other factors. Can be controlled to some extent through Equity Index Futures and Options

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Risk Measures
Beta Coefficient Measure of Risk :
Beta relates a funds return with a market index. Measures Market risk or Systematic Risk. Measures the sensitivity of the Funds returns to changes in the Market Beta of 1 Fund moves with the market i.e.Passive Fund or Index Fund Beta of less than 1 less risky than the market i.e conservative Fund. Beta of More than 1 more risky than the market i.e Aggressive Fund.

Beta not relevant to Debt Funds.

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Risk Measures
Standard deviation measure of risk
measures fluctuation in periodic returns of a scheme in relation to its own average return. relevant for both debt and equity schemes.

ALPHA - Difference between a schemes return & its optimal return. Alpha a measure of the fund managers performance. Positive alpha is indicative of out-performance by the fund manager; Negative alpha indicates underperformance. Portfolio turnover rate - Measures how many times the fund manager churns his holdings. A 100% means a complete change in portfolio during the period under consideration High indicates High Transaction Cost. Relevant for Equity/Balanced funds particularly for those which derive income from active trading. Not relevant for Value, Growth funds.

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Collected by www.BankExamsToday.com

Risk Adjusted Performance Measures

Risk and Returns have co-relation. Risk adjusted Return is measured by using Sharpe Ratio or Treynor Ratio SHARPE RATIO = _____Risk Premium___ Funds Standard Deviation ______Risk Premium ______ Funds Beta

TREYNOR RATIO =

Risk Premium - Difference between the Funds Average return and Risk free return on Government Securities or Treasury Bills over a given period Treynor ratio uses Market risk to rank funds while Sharp ratio uses total risk.

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Basic characteristics of bonds or debt security

Par value principal value Face value of the bond. Coupon annual rate of interest paid on the par value of the bond. Debt securities which mature within a year - money market securities Return that an investor earns or is likely to earn on a debt security is its yield. Current yield = (Coupon in Rs / Current Market Price) * 100 % Certificates of Deposit are issued by Banks (for 91 days to 1 year) or Financial Institutions (for 1 to 3 years) Commercial Papers are short term securities (upto 1 year) issued by companies. The difference between the yield on Gilt and the yield on a non-Government Debt security is called its yield spread
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Risk Measurement of Debt Funds

Debt Funds exposed to Risk of loss through Default (Non Performing Assets) and Interest Rate risk Interest Rate Increases, Yield Increases, Price of Existing BOND Decreases Average maturity or duration Longer the Weighted Average maturity (duration) of a debt portfolio greater the loss if interest rates go up. Modified Duration Measures Sensitivity of Bond Prices with respect to Interest Rates Higher the Modified Duration, Higher the Interest rate sensitivity of a Bond CREDIT PROFILE of Investments

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Collected by www.BankExamsToday.com

Benchmark
Benchmark Representative of the behavior of returns from the markets
MF should use Benchmarks that reflect the asset allocation / Investment Objective/representative of the portfolio of the fund. Benchmark should be calculated by an independent agency in a transparent manner and should be widely available Choice of Benchmark is easy for an Index Funds. Benchmark is decided by AMC in consultation with trustees. Benchmark mentioned in the OD should be used SENSEX,S&P CNX Nifty, BSE 100 etc are examples.

Benchmark for Debt Schemes

Developed by Rating agencies recommended by AMFI NSEs MIBOR, CRISIL LiquiFEX for Liquid Schemes ICICI Securities Sovereign Bond Index (I-Bex) Si-Bex (1 to 3 years), Mi-Bex (3 to 7 years) & Li-Bex (more than 7 years) CRISIL Gilt Bond Index for G-Sec, CRISIL AAA Corporate Bond Index CRISIL CompBEX - Composite Bond Index, CRISIL STBEX - Short-Term Bond Index CRISIL Debt Hybrid Index 60:40 : CRISIL Debt Hybrid Index 75:25
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Rapid Fire
Fundamental analysis is a evaluation of the strength of the companys price-volume charts.
True False

In a top-down approach, sector allocation precedes stock selection

True False

Which of the following is a truly international asset class

Real Estate Equity Debt Gold

Loads and taxes may account for the difference between scheme returns and investor returns
True False

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Rapid Fire
According to SEBI code for MF Advertisement, for funds that have been in existence for more than a year, annualized returns have to be furnished for 1Yr,3Yrs,5Yrs and since Inception 1yr,5yr and since launch 1yr,3yr,5yr 1yr,3yr and since launch Returns can be annualized and compounded only if the scheme has completed 30 days 12 months 6 months 24 months An Equity scheme is 90 days old. To compute yield it can use Absolute return Simple Annualized return Compounded annualized return Any of these

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Rapid Fire
Technical analysis tries to predict future movement of stock price by
The financial workings of a company The stock price movements of a company

Beta of an equity fund measures its

Performance. Systematic Risk. Non Systematic Risk Both the above.

Which one of the following portfolios is most risky

75% Equity 25% Debt 40% Equity 60% Debt 80% Equity 20% Debt

Which of the following aspects of portfolio would an investor in a debt scheme give most importance
Sector selection Stock selection Weighted Average Maturity Number of securities in portfolio
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Rapid Fire
Certificates of Deposits (CDs) are issued by
Regional Rural Banks Corporate India Schedules commercial banks None of the above

Government securities are issued through the RBI

True False

Debt securities bought at a discount to their face value are generally

zero coupon bonds or Deep discount Bonds pay interest at a floating rate none of the above

The comparable for a liquid scheme is

Equity scheme Balanced Scheme Gilt Fund Savings Bank account
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Current yield relates interest on a security to

its current market price its face value its fair value the current price of T-bills

When interest rates rise, bond prices

also rise fall are not affected fluctuate either up or down

Equity markets are more predictable in the long term than the short.
True False

Arbitrage funds are meant to give better equity risk exposure

True False

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Investor Services

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Collected by www.BankExamsToday.com

Investor Services
KYC Requirements Investments of Rs 50,000 or more Investments by a minor, KYC requirements done by the Guardian. In case of Investments by a PoA holder, KYC requirements have to be complied with, by both, investor and PoA holder. PAN Card is compulsory for all mutual fund investments except MICRO SIP MICRO SIP Aggregate SIP amount is Rs 50,000 or less. Relaxation in documentation requirements for micro-SIPs is not available for HUFs and non-individuals. It is available for NRIs, but not PIOs Dematerialisation Converting Paper holdings to Electronic Form. Rematerialisation Converting Electronic Holdings to Physical Form Investment Account of an Investor is known as FOLIO NRI / PIO applications need to be accompanied by cheque drawn on an NRO A/c (for non-repatriable investment) or NRE A/c (for repatriable investment)
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Investor Services
If payment from NRI is by DD, and investment is on repatriable basis then Foreign Inward Remittance Certificate (FIRC) from his banker is required Application Supported by Blocked Amount (ASBA) This is a facility where the investment application is accompanied by an authorization to the bank to block the amount of the application money in the investors bank account Benefit of ASBA is that the money is transferred only on allotment. Until then, it keeps earning interest for the investor. The investor does not have to wait for any refund RBI has permitted transferring Rs 50,000 per day through Mobile Banking NSEs platform is called NEAT MFSS. BSEs platform is BSE StAR Mutual Funds Platform

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CUT OFF TIMING

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CUT OFF TIMING

CUT OFF TIME Schemes other than Liquid Schemes Cut off time 3 PM for Purchase and Repurchase Same Day NAV After 3 PM Next Business day NAV The above CUT OFF Time is not applicable for NFO Schemes and International Schemes

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Scheme Type Transaction Liquid Funds Liquid Fund Funds are available on Same day Liquid Funds Sale

Cut Off Time Received anytime

Applicable NAV NAV of the day previous to the day on which Funds are available for utilization Today NAV

Sale Received after 12

Repurchase

Received till 3 Received after 3

Same Day NAV Next Day NAV NAV of the day on which funds are available for utilization Same day NAV Next Day NAV NAV of the day on which funds are available for utilization Same Day NAV

Non Liquid Schemes >= 1 Crore Non Liquid Schemes < 1 Crore Non Liquid Schemes with Outstation DD/Cheque Non Liquid Schemes

Sale Sale

Received anytime Received till 3 Received After 3

Sale

Received anytime Received till 3

Repurchase

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Rapid Fire
Foreign nationals are freely permitted to invest in Indian mutual funds
TRUE FALSE

PAN Card is compulsory for all MF investments above Rs 50,000 including SIPs
TRUE FALSE

Investments in mutual fund can be made using

Cheque / DD Remittance ASBA Any of the above

Cut-off timing guidelines are not applicable for NFOs & International Funds
TRUE FALSE

STP is a combination of SIP and SWP

True False

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Rapid Fire
Which is the most appropriate position under MF Regulation
Buyer Beware Buyer is always right Seller is always right Seller is guilty unless proved right

Practice of taking larger positions based on margin payments is called leveraging

True False

Turnover rates would be most relevant to analyze the performance of

Equity Funds Debt Funds Value Funds

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A high turnover rate for a fund indicates

high transaction costs greater efficiency high returns to the investor a rising market

The MF Regulations prescribe

The Minimum Commission to the distributor The Maximum Commission to the distributor Both of the above Neither of the Above

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An NRI holds units in a MF. What should he do if he takes up a foreign citizenship?

Redeems Continues Transfers units to his mother, who resides in INDIA None of the above

Risk factors may not be mentioned in

Product Launch Advertisement Tombstone Advertisement Performance Advertisement All of the above

Which of the distribution channels is preferred by Pvt. Mutual Fund ?

Individual Distributor Small Distribution Companies Established Distribution Companies Internet

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Collected by www.BankExamsToday.com

Financial Planning

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Types of Financial Planning Goal Oriented Financial Planning a financial plan for a specific goal like making the son a doctor Comprehensive financial plan all the financial goals of a person are taken together, & the investment strategies worked out on that basis. An objective of financial planning is also to let the investor know in advance, if some financial goal is not likely to be fulfilled.

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Collected by www.BankExamsToday.com

Financial Products
Important Points Gold futures contracts For Leveraging Deposit Insurance Scheme Upto Rs 1 lakh per depositor in a bank across branches including Principal and Interest will be paid by the insurer. Interest earned in a bank deposit is taxable each year No income tax is payable on year to year accretions in a DEBT Scheme GOLD ETF and GOLD Bonds are Exempted from Wealth Tax where as Physical Gold is NOT EXEMPTED New Pension Scheme Pension Funds Regulatory and Development Authority (PFRDA) is the regulator Tier I (Pension account), is non-withdrawable Tier II (Savings account) is withdrawable to meet financial contingencies. An active Tier I account is a pre-requisite for opening a Tier II account

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Financial Products
Investors can invest through Points of Presence (POP) 3 kinds of portfolios are available for Investors Asset Class E: Investment in predominantly equity market instruments Asset Class C: Investment in Debt securities other than Government Securities Asset Class G: Investments in Government Securities Investors can also opt for life-cycle fund. With this option, the system will decide on a mix of investments between the 3 asset classes, based on age of the investor. The 3 asset class options are managed by 6 Pension Fund Managers (PFMs) Personal Retirement Account Number (PRAN), is applicable across all the PFMs where the investors money is invested POPs offer services related to moneys invested with any of the PFMs

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Classification of Investors

Life cycle based classification

Childhood Stage Young Salaried Unmarried Investor with NO Dependants
Mediclaim / Disability Insurance Equity SIP + Whole Life Insurance

Retirement Income 2/3rd of Previous Year Income Go for Term Insurance Cheapest form of Insurance Go for Cashless Mediclaim Policy Retirement Stage Invest some portion in Equities to protect against Inflation

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Wealth Cycle Stages

Stage Accumulation Stage (Phases of Life Cycle Stage: Young Unmarried to PreRetirement.) Transition Stage Financial Needs Investing for long term identified financial goals Investment Preferences Growth options & long term products. High risk appetite

Near Term needs for funds as pre- specified needs draw closer Higher liquidity requirements / Goal has reached. transfer of wealth to the next generation, in the event of death Medium to long term

Short & Medium term investments. Lower risk appetite Liquid / Money Market Mutual Funds Lower risk appetite. Low liquidity needs. Ability to take risk & invest for long term. Wealth Preservation. Initially invested in Liquid Funds then FP charts a plan.

Reaping Stage/ Distribution Stage Equivalent to Retirement Phase of Life Cycle Stage Inter- Generational transfer

Sudden Wealth Surge (Lottery, Sale of Shares/Business, Inheritance, Contest etc.)

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Asset allocations
Asset Allocation refers to the distribution of the investors wealth between different asset classes (gold, property, equity, debt etc.) Asset Allocation helps in Risk Management Risk Profiling - Risk profiling is an approach to understand the risk appetite of investors through Survey, Questionnaire etc. Strategic Asset Allocation Investors allocation to Debt is Equal to his age. Strategic Asset Allocation is done based on Risk Profiling Tactical Asset allocation is taking calls on the likely behavior of the market. Tactical asset allocation is for seasoned investors with large investible surpluses An investor who decides to go overweight on equities i.e. take higher exposure to equities, because of expectations of buoyancy in industry and share markets, is taking a tactical asset allocation call.

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Collected by www.BankExamsToday.com

Recommending a model portfolio

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Collected by www.BankExamsToday.com

Model Portfolios for Clients

Young call centre / BPO employee with no dependents
50% in Diversified Equity Funds through SIP 20% in Sector Funds, 10% each in Gold ETF, Diversified Debt, Liquid Schemes.

Young married single income family with two school going kids
35% diversified equity schemes; 15% in gold ETF, 30% diversified debt fund, 10% each in Sector and liquid schemes

Single income family with grown up children who are yet to settle
35% diversified equity schemes; 15% each in gold ETF, gilt fund & diversified debt fund 20% liquid schemes

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Collected by www.BankExamsToday.com

Model Portfolios for Clients

Couple in their seventies, with no immediate family support
15% diversified equity index scheme; 10% gold ETF 30% gilt fund, 30% diversified debt fund, 15% liquid schemes

Couple in their seventies, with no immediate family support but very sound physically and mentally, & a large investible corpus
20% diversified equity scheme; 10% diversified equity index scheme; 10% gold ETF, 25% gilt fund, 25% diversified debt fund, 10% liquid schemes

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Business Ethics

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Ethics related regulations

Details of Sec Transactions by AMC Directors & Key Persons filed with Compliance Officer once in 6 MONTHS to avoid FRONT RUNNING Front Running - (buying or selling of any securities ahead of transaction of the fund, with access to information regarding the transaction which is not public and which is material to making an investment decision, so as to derive unfair advantage). Maintain records of all activities and transactions for at least three years, & those records shall be subject to review by the Trustees A Significant Unit holder means any entity holding 5% or more of the total corpus of any scheme MF Distributors are banned from Passing back the commissions to the investors. MF Distributors are not entitled for Brokerage for their own investments.

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Collected by www.BankExamsToday.com

Rapid Fire
Todays costs can be translated into future requirement of funds using
A=P A=P P=A P=A X (1 + i)n / (1 + i)n n X (1 + i) n X (1 + i)

According to the Certified Financial Planner Board of Standards (USA), the first stage in financial planning is
Analyse and Evaluate Clients Financial Status Establish and Define the Client-Planner Relationship Gather Client Data, Define Client Goals Develop and Present Financial Planning Recommendations and / or Options

Investor can get into long term investment commitments in

Distribution Phase Transition Phase Inter-generational Phase Accumulation Phase

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Rapid Fire
To satisfy a young investors need for growth, a greater proportion of investment should be advised in
Gilt Funds. Income Funds. Equity Growth funds. Liquid funds.

A high proportion of investment in income funds is required by

Accumulating investors. Affluent investors. Investors in the inter-generational transfer phase. Investors in the distribution phase.

For older investors who want to transfer their wealth

No financial planning is required. The right investment strategy depends upon who the beneficiaries are. The right investment strategy depends upon the state of the stock market. All the funds can be invested in aggressive equity funds.

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Investors who acquire sudden wealth.

can speculate with all the acquired money in the stock markets. Should not use any of the new wealth to invest in equity. Should take the effect of taxes into account Need not pay any taxes on the newly acquired wealth at it is not a part of their regular income.

Financial Planning is
Investing funds to receive the highest rate of return possible Resorting to tax planning to keep taxes as low as possible Planning for retirement with the maximum income possible Process of solving financial problems and reaching financial goals

The strategy advisable for an investor to maximise investment return in the long run is
Buy and hold on to investments for a long time Liquidate poorly performing investments from time to time Liquidate good performing investments from time to time Switch from poor performers to good performers

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Your client has won Rs 1 Crore in Lottery. What would your suggestion be ?
Invest the entire amount without any delay in "Old Economy stocks" - since they are back in favor Invest the entire amount immediately in an Equity Index Fund since the index is at historic low Invest in very safe liquid investment options and take the time needed to work out a financial plan Invest immediately in IT stocks, since their valuations are low

A criticism of Rupee Cost Averaging

Over a period of time average per share price will become more than guessing the highs and lows It does not tell you when to buy, sell or switch from one scheme to another Rupee cost averaging has no serious shortcomings

Which of the following has highest level of liquidity

Stocks MF Gold Real Estate
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SIP is best example of

Rupee Cost Averaging Value Averaging Buy and Hold

Direct investments in stock markets can be a better option over investing through mutual funds if
The investor wants better returns than those offered by Mutual Funds The investor has large capital, knowledge and resources for research the investor has identified a bullish phase in the stock market the investor wants to invest for the long term

Which of the following should not be viewed primarily as an investment?

Life Insurance MF Investments Debentures Stocks

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What type of portfolio asset mix would you recommend to your 55 year old client who plans to retire at the age of 58? choose a portfolio that is closest match to the investors needs
40% in equity schemes 60% in debt 40% in equity 60% in balanced 20% in equity 20% in liquid 60% in debt 100% in monthly income schemes

For which of the funds would you consider average maturity as an important factor in selecting the right one for the investor?
debt fund balanced fund a money market or liquid fund both 1 and 2 above

Distribution phase of Wealth Cycle is a parallel of Retirement phase of Life Cycle

TRUE FALSE

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Collected by www.BankExamsToday.com

Risk appetite of investors is assessed through

Risk Appetizers Asset Allocators Risk Profilers Financial Plan

The objective of asset allocation is risk management

True False

Model portfolios are a waste of time for financial planners

True False

How much equity would you suggest for a young well settled unmarried individual
100% 80% 60%

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Collected by www.BankExamsToday.com

Mutual Funds in India are required by SEBI to

prohibit their employees from personal trading in secondary markets to establish a code of conduct and allow employees to do personal trading that conforms to SEBI Guidelines allow all employees to trade freely in secondary market without any restrictions allow employees to carry on personal trading as long as they abide by SEBI guidelines.

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Collected by www.BankExamsToday.com

MODULE : AMFI MODULE ID : AM 01 TRAINER NAME : SRINIVASAN .T MOBILE : 98 94 94 9988 [email protected] Akshaya Investments, Madurai

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