Test Objectives (w.e.f. Nov 30, 2020)
Test Objectives (w.e.f. November 30, 2020)
NISM-Series-II-A: Registrars to an Issue and Share Transfer Agents – Corporate Certification Examination
Test Objectives
Unit 1: Introduction to Securities
1.1 Describe the broad categorization of securities as equity and debt and distinguish between equity and debt capital based on:
1.1.1 Contributors of fund
1.1.2 Time period
1.1.3 Cost of capital
1.1.4 Rights of the contributors
1.2 Describe the features of equity capital and benefits to equity investors
1.2.1 Limited liability
1.2.2 Ownership rights
1.2.3 Liquidity
1.2.4 Perpetuity
1.2.5 Uncertain pay-outs
1.3 Describe the features of debt capital and benefits to debt investors
1.4 Describe hybrid structures
1.4.1 Convertible debentures
1.5 Preference shares
Unit 2: Characteristics of Equity Shares
2.1 List the types of investors in Equity Shares:
2.1.1 Promoters
2.1.2 Institutional Investors
2.1.3 Public Investors
2.2 Understand the rights of common shareholders
2.2.1 Ownership rights
2.2.2 Right to dividend
2.2.3 Ownership transfer rights
2.2.4 Other rights (right to inspect documents, right to legal recourse etc)
2.3 List the risks involved in equity investing
2.3.1 No fixed return
2.3.2 No fixed tenor
2.3.3 Liquidity risk
2.3.4 No collateral security
2.4 Describe the various equity terminologies–face value, share premium, authorized capital, issued capital, paid-up capital, outstanding shares, fully paid-up shares, partly paid-up shares
2.5 Describe the various corporate actions
2.5.1 Dividend
2.5.2 Buyback of shares
2.5.3 Bonus issue
2.5.4 Stock split and Consolidation.
2.6 Discuss reduction of Share Capital through extinguishment of shares or through forfeiture of shares
2.7 Discuss Preference shares
2.8 Discuss Rights Issue of shares
2.9 Discuss briefly Preferential Issue
Unit 3: Characteristics of Debt Securities
3.1 Define the features of debt security in terms of payments such as the face value, coupon and term to maturity.
3.2 Distinguish the market value of corporate debt security from the face value.
3.3 Define current yield and yield to maturity
3.4 List the types of debt securities and describe their characteristics:
3.4.1 Convertible debt securities
3.4.2 Zero-coupon bond
3.4.3 Fixed-rate bonds
3.4.4 Floating rate bonds
3.4.5 Inflation-indexed bonds
3.4.6 Amortising bonds
3.4.7 Asset-backed securities
3.4.8 Other types of bonds (deferred interest bonds, step-up bonds)
3.5 List out the classification of the Debt market
3.5.1 Based on the type of borrower
3.5.2 Based on the tenor of the instrument
3.6 Know about Credit Rating and identify the role of Credit Rating Agencies and their symbols
3.6.1 Describe the nature of unrated bonds
3.7 Understand Money market instruments like Commercial Paper, Certificate of Deposit and Treasury Bills)
Unit 4: Characteristics of Other Securities
4.1 Identify the purpose of a warrant offering as a means to make an offering of new securities, usually debt securities, more attractive to investors
4.2 Identify the purpose of convertible debentures, to convert debt to equity over time, and manage cash flows
4.3 Identify the purpose of Depository Receipts (DRs)
4.4 Identify the purpose of Foreign Currency Convertible Bonds (FCCBs)
4.5 Discuss briefly the Exchange-Traded Funds (ETFs) and Index Funds
4.6 Compare and contrast between Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs)
4.7 Discuss briefly Alternate Investment Funds (AIFs)
4.8 Discuss briefly Corporate Fixed Deposits
Unit 5: Basics of Mutual Funds
5.1 Understand the concept of Mutual Funds
5.1.1 Identify investment objective of a fund and associate it with the portfolio
5.1.2 Describe the following concepts with illustrations:
5.1.2.1 Collective Investment Vehicle
5.1.2.2 Proportionate share of benefits
5.1.2.3 Units of a Mutual Fund
5.1.2.4 Unit Capital of a Mutual Fund scheme
5.2 Understand and list the benefits of mutual funds to investors
5.3 Describe and distinguish between open-end and closed-end mutual funds
5.4 Define Assets under Management (AUM) of a mutual fund portfolio and illustrate with an example
5.5 Define and describe Net Asset Value (NAV) of a fund
5.5.1 Discuss the assets and liabilities in a mutual fund portfolio to calculate NAV of the fund
Unit 6: SEBI – Role and Regulations
6.1 Understand the securities market regulatory environment
6.2 Understand the role of Securities and Exchange Board of India (SEBI) and importance of SEBI Act, 1992
6.3 Name SEBI regulations specifically aimed at investor protection:
6.3.1 SEBI (Prohibition of Insider Trading) Regulations, 2015
6.3.2 SEBI (Prohibition of Fraudulent and Unfair Trade practices relating to Securities Market) Regulations, 2003
6.4 Understand the role of Investor Education and Protection Fund Authority
6.4.1 Identify the purpose of the Investor Education and Protection Fund (IEPF)
6.4.2 Highlight the key aspects of the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016
6.5 Know other SEBI Regulations and Circulars:
6.5.1 SEBI (Registrars to an Issue and Share Transfer Agents) Regulation, 1993
6.5.1.1 Obligation and Responsibilities
6.5.1.2 Inspection of RTA operations
6.5.1.3 Cancellation or Suspension of Certificate of Registration
6.5.2 SEBI circular on Strengthening the Guidelines and Raising Industry standards for RTA, Issuer Companies and Banker to an Issue
6.5.3 SEBI (Intermediaries) Regulations, 2008
6.5.4 SEBI (Depositories and Participants) Regulations, 2018
Unit 7: Public Offer of Securities
7.1 Outline the different types of equity capital issuance by companies
7.2 Describe a public offer of shares
7.3 Outline the reservation of shares to certain categories of investors
7.4 Discuss an Initial Public Offer (IPO)
7.5 State the eligibility norms for public issue of shares
7.6 Discuss the Follow-on Public Offer (FPO)
7.7 Discuss buyback of securities
7.7.1 Outline the regulatory requirements for buyback offer as laid down in SEBI (Buy-Back of Securities) Regulations, 2018
7.7.2 Discuss different ways to buyback of securities by companies:
• Buy Back through a Tender Offer
• Buy Back through Stock Exchanges
• Buy Back through a Book Building Process
Unit 8: Modes of allotment of shares other than Public Offers
8.1 Know about the private placement of shares
8.2 Discuss Qualified Institutions Placements (QIP) of securities
8.3 Discuss the Rights Issues
8.4 Discuss Employee Stock Options (ESOPs)
8.5 Briefly discuss the conversion of Convertible Debentures/Bonds into shares
Unit 9: Processes related to Public Offering of Shares
9.1 Outline the different activities performed by Lead Managers in a public offer of shares
9.1.1 Pre-issue work
9.1.2 Post-issue work
9.2 List the categories of investors who participate in a public issue and their prescribed allotment limits
9.3 Describe the role and importance of Prospectus in a public offer of shares
9.4 Discuss the Red Herring Prospectus
9.5 Define underwriting and the role of underwriters
9.6 Define Green Shoe Option and explain the process
9.7 Discuss different methods of making a public issue of shares
9.7.1 Define Fixed Price Issue
9.7.2 Define Book Built Issue
• Regulatory requirements in a Book Building Offer
9.8 Discuss the SME IPOs and the difference between SME and Main Board IPO
9.8.1 List the capital requirements for SME IPOs
9.8.2 Outline the regulatory requirements for SME IPO
Unit 10: Roles and Responsibilities in a Public Issue
10.1 Discuss the different activities performed by Registrar and Transfer Agents (R&T Agents) in a public offer of shares
10.1.1 Pre-Issue Work
10.1.2 Post-Issue Work
10.2 Define Application Supported by Blocked Amount (ASBA) facility
10.2.1 Discuss the process involved for availing the ASBA facility to subscribe to public issue of shares
10.2.2 Describe the role and responsibilities of Registrar and Transfer Agents in the ASBA process
10.3 List the functions performed by Brokers to the Issue/ Syndicate Members/ Designated Intermediaries
10.3.1 Describe the brief Process of approval for basis of allotment
10.4 Describe the UPI payment process for an IPO and other Issues
Unit 11: Depository Services
11.1 Explain the concept of dematerialisation of securities
11.2 List the constituents of the Depository System
11.2.1 Discuss the roles and responsibilities of the constituents:
• Depository
• Issuer/ Registrar and Transfer Agents
• Depository Participants
• Designated Depository Participants
11.3 Describe the investors’ interface with the Depositories
11.3.1 Outline the importance of updation of investor records in the books of issuers and Depository Participants
11.3.2 Identify the rights of investors as Beneficial Owners
Unit 12: Processes related to Depositories
12.1 Explain the steps involved in dematerialisation of securities
12.2 Explain the steps involved in rematerialisation of securities
12.3 Define the concepts of Trading and Settlement
12.3.1 Differentiate between market and off-market trades
12.3.2 Highlight the importance of inter-Depository delivery
12.4 Discuss the requirement of Beneficial Owner Reporting by the depositories for updation of records to determine entitlement to corporate actions
12.5 Explain the role of Registrar and Transfer Agents in updating the investor records and effecting various corporate actions:
12.5.1 Bonus Issue/ Split/ Consolidation
12.5.2 Rights Issue
12.5.3 Mergers and Amalgamations
12.6 Describe the process of reconciliation of records between the Depository and Registrar & Transfer Agents
12.7 Briefly explain the importance of maintaining a database of Distinctive Numbers of equity shares of a listed company by the Depositories
12.8 Discuss the procedure of crediting the shares to IEPF account and servicing the claim of the investors
Unit 13: Investor Interface with the R&T Agent
13.1 Describe the process related to Transfer of physical shares for listed entities (w.e.f April 1, 2019; including the process of transfer of unlisted shares
13.2 Discuss the steps followed by RTAs in Recording changes in the investor information
13.2.1 Change in address
13.2.2 Change in bank details
13.2.3 Registering a Power of Attorney
13.2.4 Registering Nomination Form
13.2.5 Registration of FORM 15H and 15G for dividend processing as per changes in Finance Bill 2020.
13.3 Discuss the steps involved in Issuance of duplicate certificates for securities (including lost shares for both buyer and seller and stolen shares)
13.4 Discuss Stop transfer instructions
13.5 Describe the process related to Transmission of securities (Normal mode, Physical mode as well for securities which has been credited to the IEPF account)
13.6 Explain the role of Registrar and Transfer Agents in facilitating the conduct of the Annual General Meeting
13.6.1 List the advantages of e-voting facilities provided to the shareholders.
Unit 14: Secondary Market Transactions
14.1 Identify the role of the secondary market
14.2 Identify the role of the stock exchanges as facilities for conducting secondary market transactions
14.3 List the various participants in the stock markets and discuss their roles
14.3.1 Investors
14.3.2 Intermediaries
• Stock Brokers
• Depository Participants
14.4 Discuss the importance of listing of securities in a recognised stock exchange
14.5 Know the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 regarding:
14.5.1 Applicability of the Regulations
14.5.2 Common obligations of listed entities
14.5.3 Quarterly and annual compliances
14.5.4 Events requiring prior intimation and intimation within 24 hours of occurrence of event
Unit 15: Client Servicing
15.1 Define an Investor in the context of RTA organisation
15.1.1 Discuss the importance of investors in the economy
15.2 Discuss the handling of service requests through the First Time Right (FTR) approach
15.3 Explain the various principles of client servicing:
15.3.1 Attitude
15.3.2 Patience
15.3.3 Empathy
15.3.4 Compassion
15.3.5 Liaising
15.3.6 Communication skills
15.4 Discuss the service etiquettes followed by RTA organisation in client servicing
15.4.1 Outline the basic rules followed as per the Standard Operating Procedures (SOP)
15.4.2 List down the Dos and Don’ts in client servicing
15.4.3 Emphasize the effective resolution of investor grievances
15.4.4 Importance of thanking the investors
