Test Objectives

Unit 1: Investment Landscape
1.1 Describe about Investors and their Financial Goal
1.1.1 Importance of Investments
1.1.2 Know the Financial Goals
1.1.3 Compare Short term needs and Long-Term Goals
1.1.4 Know the Financial Goals, Time Horizon for their achievement and Inflation
1.2 Understand Savings and Investment
1.2.1 Factors to evaluate investments
1.3 Discuss Different Asset Classes
1.3.1 Real estate
1.3.2 Commodities
1.3.3 Fixed Income
1.3.4 Equity
1.4 1.4 Understand the classification of Investment Risks
1.4.1 Inflation Risk
1.4.2 Liquidity Risk
1.4.3 Credit Risk
1.4.4 Market Risk and Price Risk
1.4.5 Interest Rate Risk
1.5 Explain Risk Measure and Management Strategies
1.6 Understand Behavioral Biases in Investment Decision Making
1.7 Understand Risk Profiling
1.8 Explain the Asset Allocation
1.9 Comparison between the two approaches – Do-it-yourself and Taking Professional Help

Unit 2: Concept & Role of a Mutual Fund
2.1 Explain the concept of mutual fund
2.1.1 Understand the role of mutual fund
2.1.2 Understand the investment objectives of mutual funds
2.1.3 Understand the Investment Policy of mutual fund
2.1.4 Understand the important concepts in mutual funds
2.1.5 List the advantages of mutual funds for investors
2.1.6 List the Limitations of mutual funds for investors
2.2 Understand the classifications of mutual funds
2.2.1 By the structure of the fund
2.2.2 By the management of the portfolio
2.2.3 By the investment universe
2.2.4 Explain in detail the SEBI categorization of Mutual Fund Scheme
2.2.5 Explain the recent MF Schemes/products such as Smart Beta Fund, Quant Fund etc.
2.3 Describe the Growth of the mutual fund industry in India

Unit 3: Legal Structure of Mutual Funds in India
3.1 Describe the structure of mutual funds in India
3.2 Understand the key constituents of a Mutual Funds
3.2.1 Know about the Role of Sponsor
3.2.2 Know about the Board of Trustees
3.2.3 Know about the Mutual Fund Trust
3.2.4 Understand the role of Asset Management Company
3.2.5 Know the importance of Custodian
3.3 Understand the organisation structure of Asset Management Company
3.3.1 Know the Risk and Compliance Function
3.3.2 Know about Fund Management
3.3.3 Know about the operations and customer services team
3.3.4 List the role of Sales and Marketing team
3.3.5 Know about the other functions (HR function, Finance function, Administration function and Information Technology function)
3.4 Understand the role and support functions of service providers of mutual funds
3.4.1 Explain the role of Fund Accountant
3.4.2 Know the importance of Registrar and Transfer Agent
3.4.3 Explain the Responsibility of Auditor
3.4.4 Explain the importance Role of Distributors
3.4.5 Know about Collecting Bankers / Payment Gateway/Aggregators
3.4.6 Know about the role of KYC Registration Agencies
3.4.7 Know about Valuation Agencies
3.4.8 List the role of Credit Rating Agencies
3.4.9 Know about Depositories and Depository Participants (DPs)
3.4.10 Know the stock exchanges and transaction platforms for investors
3.5 Explain the Role and Function of AMFI

Unit 4: Legal and Regulatory Framework
4.1 Describe role of regulators in India
4.2 Discuss role of Securities and Exchange Board of India
4.2.1 Describe Regulatory reforms by SEBI
4.2.2 Know the important provisions of Mutual Fund Regulations
4.2.3 Explain the investment restrictions and portfolio diversification norms for mutual fund schemes.
4.2.4 Know the Important provisions pertaining to SEBI Advertisement Code and Guidelines for Mutual funds
4.2.5 Describe Investors rights and obligations
4.3 Know the Due Diligence process followed by AMCs for distributors of mutual funds
4.4 Explain Investor Grievance and Redressal standards (Explain about SCORES)
4.5 Understand AMFI Code of conduct for Intermediaries
4.5.1 Know the AMFI Code of Ethics
4.5.2 Know the AMFI Code of Conduct for Intermediaries of Mutual Funds

Unit 5: Scheme Related Information
5.1 Understanding the Mandatory Documents and their purpose, objective and significance
5.1.1 Explain Scheme Information Document (SID)―Content, Objective, relevance
5.1.2 Explain Statement of Additional Information (SAI)―Content, Objective, relevance
5.1.3 Explain Key Information Memorandum (KIM)
5.1.4 Explain Addendum
5.1.5 Discuss the regulatory provisions governing the mandatory updation of scheme document
5.1.6 Discuss Other Mandatory information / disclosure:
− Disclosure of daily NAV
− Disclosure of Total Expense Ratio
− Scheme wise dashboard on MF Website
− Portfolio Disclosure
− Financial Results
− Annual Report and related Disclosures
5.2 Explain the Non-Mandatory Disclosures

Unit 6: Fund Distribution and Channel Management Practices
6.1 Explain the role and importance of mutual fund distributors
6.2 Understand the classification of mutual fund distributors
6.2.1 Explain about Individual players
6.2.2 Explain about Non-individual entities.
6.3 Explain the modes of distribution
6.3.1 Know about Online Channel Partners
6.3.2 Know about Stock Exchange Platforms
6.3.3 Know about MF Utility (MFU)
6.3.4 Know about Computer-based & Mobile-based Apps offered by distributors
6.3.5 Know about Electronic platforms created by the AMCs
6.3.6 Know about New Age investment platforms.
6.4 Understand the Pre-requisites to become Distributor of the Mutual Fund
6.4.1 Explain the Procedure for getting empaneled as a mutual fund distributor with AMC
6.5 Explain Revenue for a mutual fund distributor
6.5.1 Define Concept of Trail Commission
6.5.2 Discuss Additional commission for promoting mutual funds in small towns
6.5.3 Explain the transaction charges
6.5.4 Understand Applicability of GST on distributors commission
6.6 Know the Commission Disclosure mandated by SEBI
6.7 Explain the Due Diligence Process by AMCs for Distributors of Mutual Funds
6.8 Difference bet distributors and advisor role in context of Amendment to SEBI Investor Advisory Regulation
6.8.1 Advisory
6.8.2 Execution Wholly
6.8.3 Do Mutual Fund Distributors advise their client? (box)
6.9 Discuss Nomination facilities to Agents / Distributors and Payment of Commission to Nominee
6.10 Explain about change of distributor

Unit 7: Net Asset Value, Total Expense Ratio and Pricing of Units
7.1 Discuss the Fair Valuation Principles
7.2 Compute net assets of a mutual fund scheme and NA
7.2.1 Understand the Net Assets of Scheme
7.2.2 Understand the Net Asset Value (NAV)
7.2.3 Understand the concept of Mark to Market
7.2.4 Understand the Total Expense in Mutual Fund Scheme.
7.2.5 Perpetual Bond Valuation
7.3 Explain about Dividends & Distributable Reserves
7.4 Know about the Concept of Entry and Exit Load and its impact on NAV
7.5 Know about the Key Accounting and Reporting Requirements applicable to mutual funds
7.6 Know about the NAV, Total expense ratio and pricing of units for the Segregated Portfolio

Unit 8: Taxation
8.1 Understand Applicability of various taxes in respect of mutual funds
8.1.1 Income from investment in mutual fund units
8.1.2 Income earned by mutual fund schemes
8.1.3 Income earned by the investor from investment in mutual fund units
8.2 Understand about Capital gains, Capital gains (Long term & Short term) tax and Indexation.
8.3 Understand about the Dividend Income and Dividend Income tax
8.4 Understand Stamp duty on mutual funds
8.5 Understand the basics of Setting off Gains and Losses under Income Tax Act
8.6 Understand about Securities Transaction Tax
8.7 Understand about Tax benefit under Section 80C of the Income Tax Act for investment pertaining to mutual funds
8.8 Understand about Tax Deducted at Source (TDS) in mutual funds
8.9 Understand Applicability of GST in mutual funds

Unit 9: Investor Services
9.1 Describe the NFO Process
9.2 Explain about the New Fund Offer Price /On-going price for subscription
9.3 Discuss Different types of investment plans and Services
9.3.1 Understand the Difference between Direct and Regular Plans
9.3.2 Differentiate the features of a Income distribution cum capital withdrawal payout, Income distribution cum capital withdrawal re-investment and growth options
9.4 Explain how the mutual fund units are allotted to the investor
9.5 Describe the content and periodicity of Statement of Accounts for investments
9.6 Describe different types of Mutual Fund Investors
9.7 Explain how to fill in the application form for mutual funds
9.8 Describe the financial transactions with mutual funds (Purchase, Redemption and Switches)
9.8.1 Describe the different payment mechanisms for purchasing mutual fund units
9.8.2 Explain the different payment mechanism for repurchase of units
9.9 Explain Cut-off time and Time Stamping
9.10 Describe the KYC requirement for mutual fund investors
9.10.1 Explain the concept of KYC and list the documents required for KYC compliance
9.10.2 Explain about KYC Registration Agencies (KRAs)
9.10.3 Explain the process of KYC
− Minors
− NRI
− PoA holder
9.10.4 Describe the additional documentation requirements applicable to institutional investors
9.10.5 Explain Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards (CRS)
9.11 Explain the different types of systematic transactions
9.11.1 Describe Systematic investment plan (SIP)
9.11.2 Describe Systematic Withdrawal Plan (SWP)
9.11.3 Describe Systematic transfer plan (STP)
9.11.4 Know about Switch
9.11.5 Describe Dividend Transfer Plan (DTP)
9.12 Explain operational aspects of systematic transaction
9.13 Explain Non – Financial Transactions in Mutual Funds
9.13.1 Explain Nomination
9.13.2 Explain Pledge/ lien of units
9.13.3 Understand the concept of Demat Account
9.13.4 Explain change in folio details
9.13.5 Explain Transmission of units
9.14 Discuss change in Status of Special Investor Categories
9.14.1 Minor turned Major
9.14.2 NRI to Resident Indian
9.14.3 Change in Karta of HUFs
9.15 Explain Investor Transactions – turnaround times

Unit 10: Risk, Return and Performance of funds
10.1 Understand the General and Specific Risk Factors
10.1.1 Specify General Risk Factors
10.1.2 Specify Specific Risk Factors
10.2 Explain the Factors that affect mutual fund performance
10.2.1 Compare market / systematic risk and company specific risk
10.3 Describe Drivers of Returns and Risk in mutual fund Scheme
10.3.1 Explain the Factors that affecting performance of Equity Schemes
10.3.2 Explain the Factors that affecting performance of Debt Schemes
10.3.3 Explain the Factors that affecting performance of Gold Funds
10.3.4 Explain the Factors that affecting performance of Real estate funds
10.4 Understand the Measures of Returns
10.4.1 Discuss the Simple Return
10.4.2 Discuss the Annualized Return
10.4.3 Discuss the Compounded Return
10.4.4 Compounded Annual Growth Rate
10.5 Know about the SEBI norms regarding representation of returns by mutual funds in India
10.6 Explain risks in fund investing with a focus on investors
10.6.1 Identify the sources of risk in an equity funds
10.6.2 Identify the sources of risk in a debt funds
10.6.3 Identify the sources of risk in hybrid funds
10.6.4 Identify the sources of risk in Gold Funds
10.6.5 Identify the sources of risk in Real Estate Funds
10.7 Understand the Measures of Risk
10.7.1 Understand the concept of Variance
10.7.2 Understand the concept of Standard Deviation
10.7.3 Understand the concept of Beta
10.7.4 Understand the concept of Modified Duration
10.7.5 Understand the concept of Weighted Average Maturity
10.7.6 Understand the concept of Credit Rating
10.8 Explain certain provisions with respect to Credit risk
10.8.1 Understand the Gating or restriction on redemption in mutual funds
10.8.2 Explain segregated portfolios or side pocketing

Unit 11: Mutual Fund Scheme Performance
11.1 Explain the concept of Benchmarks
11.2 Compare Price Return Index and Total Return Index
11.3 Identify the Basis of choosing an appropriate performance benchmark
11.4 Describe the use of market benchmarks to evaluate Equity Fund Performance
11.5 Describe the use of market benchmarks to evaluate Debt Fund Performance
11.6 Describe the use of market benchmarks to evaluate Other Schemes
11.7 Explain Quantitative Measures of Fund Manager Performance
11.7.1 Know about Sharpe Ratio
11.7.2 Know about Treynor Ratio
11.7.3 Know about Alpha
11.8 Define Tracking Error
11.9 Understand the different Sources for disclosure of scheme performance (Scheme documents, AMFI and AMC website and Fund Fact Sheet).

Unit 12: Mutual Fund Scheme Selection
12.1 Explain Scheme Selection based on Investor needs, preferences and risk-profile
12.2 Explain Risk Levels in mutual fund scheme
12.3 Explain Scheme Selection based on investment strategy of mutual funds
12.4 Explain Selection of Mutual Fund scheme offered by different AMCs or within the scheme category
12.5 Know about selecting options in mutual fund schemes
12.6 Know about Do’s and Don’ts while selecting mutual fund schemes