Mutual Fund Distributor Exam

Mutual funds are packages that contain stocks, bonds, and other financial assets for investment. They offer a structured portfolio and have become one of the vital facets of share market investment.

If you want to capitalize on mutual funds, it is essential to have some basic knowledge. However, you can go one step ahead and become a mutual fund distributor to enjoy dual benefits — invest your money and gain commissions by guiding other investors.

So, this prospect can become a career option and a beneficial source of investment. You need to appear for the mutual fund distributor exam to become an authentic advisor.

This article explains all the details of obtaining a NISM certification and leveraging the Indian share market.

NISM Mutual Fund Distributor Exam Eligibility

Why should you appear for the National Institute of Securities Markets (NISM) mutual fund distributor exam?

Well, the answer is simple. You gain knowledge to start sales and distribution of mutual funds. In addition, you also acquire information on the following aspects:

• Functioning of employees and companies dealing in mutual funds
• Details on wealth management firms that sell and distribute mutual funds

To become a mutual fund distributor, you need to full fill the following eligibility criteria:

• The age bracket is above 18 years
• You are a distributor, broker, or employed in any mutual fund firm
• Students or any professionals who want to start their career in the stock market

Notably, there are no minimum educational qualifications to appear and receive this NISM certification.

Mutual Fund Distributor Exam Registration

The process to register for the mutual fund distributor examination (NISM Series VA exam) is straightforward. Initially, you need to visit the National Institute of Securities Market (NISM) official website.

Next, follow the steps below and apply for the NISM certification:

• Register your account by entering the required details
• Upload the documents as per instructions
• Wait for the designated time frame to receive profile approval
• After approval, log in to your NISM account
• Book the NISM Series VA Examination for Mutual Fund Distributor
• Enter the details like date, city, time, and preferred mode of examination
• Pay the fees and start preparing for the test

Overall, the swift online application minimizes the hassle of completing the necessary formalities.

NISM Mutual Fund Distributor Exam Syllabus

The NISM mutual fund distributor exam is a test that does not have negative markings. You have to solve 100 questions in two hours.

For passing, you need to score at least 50% marks in the test. Here are the contents that you need to prepare before the NISM Series VA examination:

• Investment Landscape: Indian economy, asset classes, risk profiling, asset allocation, etc.
• Concept and role of mutual fund: Classification, growth, and concept
• Mutual fund legal structure: Key constituents, AMFI, asset management company organization structure, etc.
• Legal and regulatory framework: Role of regulators, SEBI functions, investor grievances, AMFI code of conduct, etc.
• Scheme information: Mandatory documents, purpose, and non-mandatory disclosures
• Fund distribution and channel management: Mutual fund distributors' roles, modes, classification, revenue, mandatory commission disclosure, etc.
• Net asset value: Fair valuation principles, dividends, expense ratio, pricing of units, entry and exit load concepts, computation of net assets, etc.
• Taxation: Various taxes, capital gains, dividend income tax, securities transaction tax, TDS in mutual funds, GST applicability, etc.
• Investor services: Investment plans, cut-off time, KYC requirement, types of systematic transactions, non-financial transactions, turnaround times, etc.
• Risk, return, and fund performance: Measures of returns, risk factors, credit risk, etc.

In addition, you also need to study mutual fund scheme performance and selection. Ensure that you have a decent knowledge of equity and debt fund performances.

You should also understand how to select mutual funds based on different investment strategies.

NISM Mutual Funds Exam Fees

To appear for this examination, you need to pay a basic registration fee of INR 1,500/-. However, there can be extra charges for payment gateway and other taxes.

So, accommodate extra cash to appear for the mutual fund agent exam.

Fees to Reappear for the NISM VA Exam

The validity to enrol for the NISM mutual fund distributor examination is 180 days. Also, the NISM certification is valid for three years after passing the test.

However, if you fail to pass the evaluation for any reason, you need to re-apply for the mutual fund distributor exam. The fees will remain the same, i.e., INR 1,500/-.

Preparation Tips for NISM Mutual Fund Distributor Examination

If you are interested in appearing for this role, here are some handy tips to follow and perform in the examination:

• You can purchase online NISM workbooks from reputed sources
• Plan each lesson and practice the previous year's question papers
• Mock tests are vital to gauge your performance before the test

The NISM mock tests help reduce your anxiety as you know the mutual fund distributor exam pattern. It is also important to note that the mutual fund certificate for this role is valid for a period of three years. Also, there is no scope for re-evaluation of the candidate's performance. The marking system is robust and uses an electronic system to measure your test performance.

So, this process leaves minimal scope for error in the marking procedure.

Frequently Asked Questions:

How can I become a mutual fund distributor?

You can become a mutual fund distributor by opting for the NISM-certified exams. So, prepare in advance after reviewing the syllabus and appearing for the online test.

Which exam is required for mutual fund distributors?

You need to appear for the NISM VA Mutual Fund Distributor exam to understand all the basics of this topic. Always refer to the official website to register for the right assessment and receive legal NISM certification.

Are mutual fund distributors' exams hard?

The mutual fund distributor examination has an average to moderate level of difficulty. Still, this test has no negative marking, and you can cover the syllabus with prior preparation. Interested candidates can also refer to online videos and content to study the topics in the syllabus.

How much do mutual fund distributors earn?

A mutual fund distributor earns a commission behind every successful deal. This amount ranges between 0.1% to 2% of a successful purchase. So, the annual earnings of these professionals can vary significantly.  

Can a candidate choose to reschedule the chosen exam date and time?

Yes. Candidates can reschedule the exam date for a period of 15 days before the exam. However, this rescheduling depends on the availability of desired slots that year.

How can I pass the NISM mutual fund exam?

You can pass the NISM mutual fund exam through efficient planning and practice. To pass this exam, you need to score at least 50% marks. This implies you need to answer 50 questions correctly in two hours. So, keep a track of time and practice the mock tests available online.

Furthermore, you can even use study materials available at a mutual fund distribution company to cover all the details in depth.

What is the number of attempts an individual can avail for the NISM exam?

You can reschedule the exam in case of failure for any reason. However, this process can happen only once after enrolling. If you want to reschedule the test again, the NISM can process the request after evaluating your case.