Question Set 2D

Welcome to the Mutual Fund Distributor Demo Examination :
Get ready to test your knowledge of the NISM-Series-V-A: Mutual Fund Distributors Certification Examination.

1. What is the purpose of One-Time Mandate (OTM)?

To authorize mutual fund transactions automatically.

To prevent unauthorized transactions.

To register a new mutual fund account.

To pay for mutual fund transactions in cash.

2. Which payment modes are accepted for mutual fund purchases?

Credit cards.

Net Banking, Debit cards, UPI.

E-Wallets only.

Cheques only.

3. How long does it take to register an OTM mandate?

1 week.

3 to 4 weeks.

2 days.

1 month.

4. What is required to cancel an OTM mandate?

A cancelled cheque.

An OTM cancellation form.

A new OTM registration.

Online authentication.

5. What additional requirement is there for third-party payments over Rs. 50,000?

A PAN card.

A signed cheque.

KYC compliance.

Aadhaar authentication.

6. What method is allowed for NRIs to invest in mutual funds on a repatriable basis?

Cheque from an NRO account.

Credit card.

Cheque from an NRE account.

E-Wallet payment.

7. What is the main restriction when using E-Wallets for mutual fund subscriptions?

Cannot use credit card-loaded funds.

Only supports UPI-based transfers.

No KYC norms are required.

Unlimited annual transactions allowed.

8. How are payments for mutual fund purchases made through cash limited?

Rs. 50,000 per investor, per mutual fund, per financial year.

Rs. 1,00,000 per investor, per financial year.

Rs. 25,000 per transaction.

Unlimited cash payments allowed.

9. What is a Third Party Payment?

Payment through the investor’s account only.

Payment made from an account other than that of the first holder of the folio.

Payment through UPI exclusively.

Payment through cash.

10. What is the maximum value of gifts allowed as third-party payments on behalf of minors?

Rs. 1,00,000 per year.

Rs. 50,000 per year.

Rs. 10,000 per month.

Rs. 25,000 per month.

11. How should mutual fund cheques be prepared for each scheme/plan?

Using a single cheque for all schemes.

A separate cheque for each scheme/plan.

Cash payment for each scheme.

Only debit cards are allowed for schemes.

12. For electronic mutual fund payments, which of the following is NOT accepted?

RTGS.

NEFT.

IMPS.

Postal orders.

13. What kind of bank accounts can NRIs use for non-repatriable mutual fund investments?

NRE/FCNR accounts.

NRO/NRE/FCNR accounts.

Indian savings accounts.

Prepaid cards.

14. Which method ensures that third-party payments can be traced in mutual fund transactions?

RTGS receipts.

Independent traceability of the end investor.

Using only cheques.

Providing Aadhaar authentication.

15. Which of the following is a mandatory document for a third-party mutual fund payment?

Aadhaar card.

Prepaid card statement.

KYC-compliant declaration form.

Insurance policy.

16. What is the traditional payment approach for repurchasing mutual fund units?

Electronic transfer.

Cheque.

Debit card.

Credit card.

17. Which of the following is NOT an electronic mode of payment for repurchase proceeds?

NEFT.

RTGS.

Demand Draft.

NACH.

18. For units held in dematerialized form, where are the redemption proceeds paid?

Investor’s registered postal address.

Bank account registered with the DP.

Mutual fund’s account.

Any bank account provided by the investor.

19. What is the payment limit for repurchases using the Instant Access Facility (IAF)?

Rs. 1,00,000.

Rs. 50,000.

Rs. 25,000.

Rs. 75,000.

20. What is the cut-off time for purchases in equity-oriented funds?

1:30 pm.

3:00 pm.

4:00 pm.

5:00 pm.

21. Which NAV is applicable if funds for a liquid fund purchase are available by 1:00 pm on the transaction day?

Same day’s NAV.

Previous day’s NAV.

Next business day’s NAV.

NAV of the day funds are utilized.

22. What happens if an equity fund redemption request is submitted after the cut-off time?

Same day’s NAV.

Next business day’s NAV.

Previous day’s NAV.

Immediate NAV.

23. How many bank accounts can a non-individual investor register with a mutual fund?

24. If an NRI redeems an investment made from an NRE account, where can the proceeds be credited?

NRE or FCNR account.

Only to an NRO account.

Only to an Indian savings account.

Investor’s postal address.

25. Which account will be used if the investor does not specify a different account for redemption payments?

The mutual fund’s account.

Investor’s demat account.

The default bank account.

Any bank account provided.

26. Which type of mutual fund scheme allows the use of the Instant Access Facility (IAF)?

Debt funds.

Equity funds.

Liquid funds.

Hybrid funds.

27. What is the limit on Instant Access Facility redemptions per day per investor?

Rs. 50,000 or 80% of investment value.

Rs. 1,00,000 or 70% of investment value.

Rs. 50,000 or 90% of investment value.

Rs. 25,000 or 75% of investment value.

28. Where must mutual fund transaction requests be submitted to ensure accurate time stamping?

Distributor’s office.

Any postal office.

Official Points of Acceptance (OPoAs).

Any bank branch.

29. What mechanism is used to capture the time of transaction for online mutual fund applications?

Investor’s computer clock.

Distributor’s server.

Web server time.

Mutual fund’s internal clock.

30. What document is mandatory for mutual fund investors, unless exempt?

Voter ID.

Aadhaar card.

Permanent Account Number (PAN).

Passport.

31. What is the maximum amount for which an investor can be exempt from PAN in mutual fund investments?

Rs. 25,000.

Rs. 50,000.

Rs. 1,00,000.

Rs. 75,000.

32. An investor submits an application to purchase units of an equity fund on Monday. If funds are realized on Wednesday by 5 pm, which NAV applies?

Monday’s NAV.

Wednesday’s NAV.

Thursday’s NAV.

Friday’s NAV.

33. An investor makes an application to redeem units from a liquid fund on Monday before 3:00 pm. What NAV applies?

Same day NAV.

Tuesday’s NAV.

Monday’s NAV.

Wednesday’s NAV.

34. What happens if a liquid fund redemption request is received through IAF after the cut-off time?

NAV of the day of receipt.

Lower of the next day’s or the current day’s NAV.

NAV of previous day.

NAV of the day after next.

35. When are mutual funds allowed to calculate NAV for each calendar day?

Equity funds.

Debt funds.

Liquid funds.

Balanced funds.

36. For non-financial transactions like change of address, what information is relevant for time stamping?

Date and time.

Only the date.

Only the time.

No time stamping required.

37. What is the PAN exemption limit for a Micro-SIP investment per financial year?

Rs. 50,000.

Rs. 25,000.

Rs. 1,00,000.

Rs. 75,000.

38. When does SEBI require the daily time stamping of purchase applications?

Only when required by the AMC.

For transactions above Rs. 1,00,000.

For all transactions regardless of amount.

Only for non-business days.

39. Which of the following documents can be submitted as an alternative to PAN for KYC purposes for small investors?

Aadhaar card.

Driving License.

Passport.

All of the above.

40. What happens if redemption is requested through IAF up to the cut-off time in a liquid fund?

NAV of the previous calendar day.

NAV of the current day.

The lower of the NAV of the previous or current day.

NAV of the next business day.

41. How many bank accounts can an individual investor register with a mutual fund?

42. For an NRI investor who used an NRO account for investment, what account must be used for redemption?

NRE account.

Foreign account.

NRO account.

Any bank account.

43. If an investor submits a redemption request after 3:00 pm for equity-oriented funds, when will the NAV be applicable?

Same day.

Next business day.

Previous day.

Immediately.

44. What time is the cut-off for submitting a redemption request in liquid funds?

1:00 pm.

2:00 pm.

3:00 pm.

4:00 pm.

45. What is the maximum limit for an investor to be exempted from KYC requirements for mutual fund investments?

Rs. 25,000.

Rs. 50,000.

Rs. 75,000.

Rs. 1,00,000.

46. What is the primary purpose of KYC Registration Agencies (KRAs)?

To manage investment portfolios.

To centralize KYC processes across the capital market.

To issue PAN cards.

To facilitate stock trading.

47. Which SEBI circular first prescribed uniform KYC norms?

August 22, 2011.

November 26, 2015.

October 5, 2011.

December 26, 2013.

48. Which entity authorizes the e-KYC process as a valid method for KYC verification?

SEBI.

RBI.

UIDAI.

CERSAI.

49. Which entity is responsible for performing the functions of the Central KYC Records Registry?

RBI.

SEBI.

CERSAI.

UIDAI.

50. What is the function of the Central KYC Records Registry?

To issue KYC identifiers for clients.

To manage investments on behalf of clients.

To update investors on mutual fund performance.

To perform IPV for investors.

51. Which of the following documents is required for KYC compliance for NRI investors?

Aadhar card.

Voter ID.

Passport/PIO/OCI card.

Driver’s license.

52. What is Part II of the standard account opening form used for?

General KYC details.

Stock exchange-specific details.

Mutual fund-specific details.

Address verification.

53. What is the verification mechanism for a customer’s PAN in the online KYC process?

OTP.

UIDAI system.

Tax database.

Digi locker.

54. Who is responsible for performing the In-Person Verification (IPV) of an investor?

SEBI.

Registered intermediaries.

Central Government.

Mutual fund houses.

55. What is required from Power of Attorney (PoA) holders for KYC compliance?

holders for KYC compliance?

Only the PoA holder needs KYC compliance.

Both the investor and the PoA holder must comply with KYC.

The PoA holder can apply for KYC on behalf of the investor.

56. What additional details must be captured in the mutual fund application form for KYC purposes?

Politically Exposed Person (PEP) status.

Investment goals.

Transaction history.

Email address.

57. In case of change of address for an investor, what process must be followed?

Submit documents to the mutual fund only.

Re-initiate the entire KYC process.

Fill out a standard form and update with a KRA.

Inform the stock exchange only.

58. For Aadhaar-based e-KYC, who must authorize access to their data?

SEBI.

The intermediary.

The investor.

UIDAI.

59. Which method is NOT part of the online KYC process?

eSign.

Digi locker.

Wet signature submission.

Physical visit to intermediary.

60. What unique identifier is issued to clients by the Central KYC Registry?

PAN number.

Aadhar number.

KYC identifier.

UBO identifier.

61. Which of the following is used to verify a customer’s mobile number and email during the online KYC process?

UIDAI.

Digi locker.

One Time Password (OTP).

Penny drop mechanism.

62. Who is responsible for safeguarding and retrieving KYC records in digital form?

SEBI.

Central KYC Registry.

Depository Participants.

CERSAI.

63. Which of the following cannot be used as a substitute for IPV (In-Person Verification)?

KYC through depository participant.

Verification by mutual fund distributor.

E-KYC through UIDAI.

1 copy attested by a Notary Public.

64. What is the requirement for a minor investing in mutual funds?

KYC of the minor.

Guardian’s KYC.

Both minor and guardian must complete KYC.

No KYC required.

65. Which of the following technologies can be used for online KYC, as per SEBI guidelines?

OTP.

Aadhar eSign.

Digi locker.

All of the above.

66. Who is required to provide UBO (Ultimate Beneficial Owner) details?

Individual investors.

Listed companies.

Institutional investors.

NRIs.

67. In which scenario is Aadhaar Authentication allowed in the securities market?

After KYC submission.

For demat account holders.

Under Section 11A of PMLA.

For NRIs only.

68. What is mandatory for mutual fund distributors who wish to provide Aadhaar Authentication services?

Obtain a special Aadhaar license.

Collaborate with CERSAI.

69. Which of the following is NOT a requirement for institutional investors?

Board Resolution.

Eligibility to invest.

KYC for PoA holder.

Ultimate Beneficial Owner (UBO) details.

70. When should a mutual fund report a foreign investor under FATCA?

When the investor holds more than 10% of shares.

When the investor has tax residency outside India.

When the investor provides a PAN number.

When the investor requests it.

71. What is required from NRIs for KYC compliance, in addition to a passport?

Aadhaar card.

Overseas address proof.

Indian bank account.

PAN card.

72. Which entity is NOT authorized to facilitate KYC documentation?

Brokers.

KYD compliant mutual fund distributors.

Scheduled commercial banks.

Insurance companies.

73. Which section of the PML Rules authorizes CERSAI to act as the Central KYC Record Registry?

Section 2.

Section 11A.

Section 10.

Section 6.

74. What is used for verifying bank account details during online KYC?

PAN verification.

Penny drop mechanism.

Digi locker verification.

One Time Password (OTP).

75. What action must an investor take in case of a change in status after being identified under FATCA?

No further action required.

File a fresh KYC form.

Report the change to the mutual fund.

Request the bank to update the status.

76. What is a systematic investment plan (SIP)?

A lump sum investment.

Regular investment of constant amounts.

Transfer of funds between schemes.

Withdrawal of funds periodically.

77. The advantage of an SIP in a volatile market is known as:

Dividend reinvestment.

Profit booking.

Rupee Cost Averaging.

Capital gain.

78. What does SIP stand for?

Systematic Income Plan.

Structured Investment Procedure.

Systematic Investment Plan.

Securities Investment Program.

79. Which facility allows investors to make regular withdrawals?

SIP.

SWP.

STP.

DTP.

80. What is the main purpose of an SWP?

Make lump sum investments.

Periodically withdraw fixed amounts.

Transfer funds to another scheme.

Re-invest profits automatically.

81. How does an SWP help investors during a market trough?

It switches investments to equity.

Withdrawals are spread over time.

It redeems all units at once.

It avoids taxes on withdrawals.

82. What is the impact of an exit load on an SWP withdrawal?

Increases the NAV.

Reduces the amount transferred.

Increases the number of units sold.

Eliminates taxes.

83. What does STP stand for in mutual funds?

Systematic Transfer Plan.

Standard Transaction Process.

Short-Term Profit.

Secure Transfer Policy.

84. In an STP, what happens to the withdrawn amount?

It is redeemed into cash.

It is reinvested into another scheme.

It is held in reserve.

It is invested in stocks.

85. Which of the following is a key benefit of using an STP?

Complete withdrawal at market peak.

Reducing investment paperwork.

Reducing the need for lump sum investments.

Providing guaranteed returns.

86. A “Switch” in mutual funds refers to:

Redeeming and purchasing units in the same scheme.

Transferring funds between schemes.

Reinvesting dividends.

Canceling a SIP.

87. Which facility allows dividends earned from one scheme to be reinvested in another?

SIP.

SWP.

DTP.

STP.

88. Which of the following facilities can help balance risk by transferring dividends from equity to debt funds?

SIP.

SWP.

DTP.

STP.

89. In a DTP, what is transferred?

Units.

Principal.

Dividends.

Lump sums.

90. What type of transaction is a “switch”?

One-time transaction.

Periodic transaction.

Transfer of dividends.

Cancelation of a fund.

91. What is the typical default frequency for systematic investments like SIPs?

Weekly.

Monthly.

Semi-annually.

Annually.

92. When registering for an SIP, the minimum registration time is typically:

10 days.

15 to 30 days.

60 days.

No registration time is required.

93. The minimum amount specified for each tranche of an SIP is set by:

The investor.

The mutual fund.

The bank.

The market conditions.

94. How can an investor increase their SIP amount over time?

Switch plans.

Cancel the existing SIP.

Invest in a new fund.

95. A benefit of the SIP Top-up Facility is:

Automatic profit booking.

Increase in SIP amounts as income grows.

Reduced risk of market fluctuations.

Fixed returns.

96. How can an SIP be canceled?

By informing the mutual fund in writing.

By switching to another plan.

Automatically after 1 year.

SIPs cannot be canceled.

97. What happens when an investor cancels an SWP?

No further withdrawals occur.

Funds are transferred to another scheme.

Withdrawals continue automatically.

The SWP amount is doubled.

98. A systematic transfer plan (STP) involves:

Selling units in one scheme and buying in another.

Withdrawing funds at regular intervals.

Re-investing dividends into the same scheme.

Selling units at a market peak.

99. What is required to register a Switch instruction?

PAN and Aadhaar.

Transaction slip.

SIP enrollment form.

KYC form.

100. When an STP is canceled, what happens?

All funds are redeemed.

No more transfers occur.

Units are automatically switched.

Transfer limits are increased.

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