Unit ko samjho · NISM Series XIX-A
Regulatory Framework – Indian Context
15 questions is unit mein
Sawaal aur jawaab English mein hain, kyunki NISM ka exam paper bhi English mein hota hai.
Is unit mein kya hai
- What is the general minimum scheme corpus for an ordinary Category II AIF under regulation 10(b)?
- For an ordinary Category II scheme, what is the minimum investment by a non-accredited individual with no employee or director exception?
- What minimum investment applies to a non-accredited employee of the manager investing in an ordinary Category II AIF?
- What is the minimum tenure specified for a Category I or Category II AIF scheme?
- A material alteration to an AIF’s fund strategy requires consent from at least which proportion of unit holders?
- An ordinary Category II scheme has a ₹120 crore corpus. What minimum continuing interest must its manager or sponsor maintain?
- Which method is NOT allowed for meeting the manager or sponsor’s required continuing interest in a Category II AIF?
- A Category II scheme constituted as a trust has 970 non-accredited investors and 80 accredited investors. It is not an angel fund, and only regulation 10(f)’s investor-number test is being checked. What is the result under the current rule?
- An ordinary Category II scheme has ₹200 crore corpus and ₹40 crore estimated management and administration expenses. What is its single-investee limit, excluding large-value-fund exceptions?
- With the required consent, how far may an ordinary closed-ended AIF extend its tenure, excluding the accredited-investors-only fund exception?
- Why is SEBI registration alone insufficient to establish that an overseas subscription in an Indian AIF is permitted?
- Under regulation 10(aa), AIF units must be issued in which form, subject to SEBI’s specified conditions?
- A distributor tells a client that registration means SEBI has approved the fund’s expected return. The fund’s materials contain investment risks and no return guarantee. Which correction is appropriate?
- For a newly registered angel fund under the current framework, which investors may subscribe outside the specific key-management-personnel exception?
- A Category II fund wants independent portfolio valuations annually instead of every six months. Investors holding 76% by investment value approve the change. The manager also proposes removing the independent valuer. Which proposal is consistent with regulation 23(2)?
Zaroori ideas
Practice bank se · 1
What is the general minimum scheme corpus for an ordinary Category II AIF under regulation 10(b)?
The general minimum corpus for an ordinary Category II scheme is ₹20 crore. Special rules for other specified fund types should not be applied to this scheme. Remember: Read a minimum corpus rule at scheme level, not investor level.
Hint Distinguish a scheme’s total committed corpus from one investor’s subscription. Common mistake: Using a special fund-category exception for an ordinary Category II scheme.
XIX-A-022Practice bank se · 2
For an ordinary Category II scheme, what is the minimum investment by a non-accredited individual with no employee or director exception?
The general minimum investment is ₹1 crore for the investor described. Accredited investors and specified employees or directors are treated differently under the regulations. Remember: Investor minimums depend on the investor’s applicable status and exceptions.
Hint Apply the ordinary investor rule after excluding the named exceptions. Common mistake: Applying an employee or accredited-investor exception to an ordinary investor.
XIX-A-023Practice bank se · 3
What minimum investment applies to a non-accredited employee of the manager investing in an ordinary Category II AIF?
A qualifying employee of the manager has a minimum investment requirement of ₹25 lakh. The question excludes accredited status and concerns the specific employee exception. Remember: A manager’s qualifying employee may use the specified employee minimum.
Hint Recall that certain fund and manager employees have a separate subscription threshold. Common mistake: Assuming that every investor has the same minimum subscription.
XIX-A-024Practice bank se · 4
What is the minimum tenure specified for a Category I or Category II AIF scheme?
A Category I or Category II scheme must have a minimum tenure of three years. Its disclosed actual tenure may be longer. Remember: A minimum tenure is not a promise that every scheme ends at that minimum.
Hint Separate the original minimum term from any later extension period. Common mistake: Confusing the minimum original tenure with an extension limit.
XIX-A-025Practice bank se · 5
A material alteration to an AIF’s fund strategy requires consent from at least which proportion of unit holders?
A material strategy alteration requires consent of at least two-thirds of unit holders by investment value. Counting only the number of investors can produce the wrong result. Remember: A regulatory consent threshold includes both its percentage and its voting basis.
Hint Check both the fraction and how investors’ votes are weighted. Common mistake: Using the correct fraction with the wrong voting denominator.
XIX-A-026Practice bank se · 6
An ordinary Category II scheme has a ₹120 crore corpus. What minimum continuing interest must its manager or sponsor maintain?
The required continuing interest is ₹3 crore because the lower of 2.5% of corpus and ₹5 crore applies. Percentage amount = 2.5% × ₹120 crore = ₹3 crore. Lower of ₹3 crore and ₹5 crore = ₹3 crore. Remember: Apply both parts of a lower-of rule before choosing the result.
Hint Calculate the percentage amount and compare it with the rupee cap. Common mistake: Using the rupee cap as a flat requirement for every corpus size.
XIX-A-027Practice bank se · 7
Which method is NOT allowed for meeting the manager or sponsor’s required continuing interest in a Category II AIF?
A management fee waiver cannot substitute for the required continuing interest. The rule requires an investment in the AIF rather than that form of fee waiver. Remember: Fee concessions are not a substitute for required continuing capital.
Hint Distinguish actual capital at risk from a charge that is simply not collected. Common mistake: Counting forgone fees as if the sponsor had invested the same amount.
XIX-A-028Practice bank se · 8
A Category II scheme constituted as a trust has 970 non-accredited investors and 80 accredited investors. It is not an angel fund, and only regulation 10(f)’s investor-number test is being checked. What is the result under the current rule?
The scheme passes this test because 970 investors count towards the 1,000 limit. The current rule excludes accredited investors from the count, and this answer does not assess other compliance conditions. Remember: Apply the current exclusions before testing an investor-number ceiling.
Hint Identify which investor class the current rule excludes before counting. Common mistake: Using a total headcount without checking the accredited-investor exclusion.
XIX-A-029Practice bank se · 9
An ordinary Category II scheme has ₹200 crore corpus and ₹40 crore estimated management and administration expenses. What is its single-investee limit, excluding large-value-fund exceptions?
The single-investee limit is ₹40 crore because the ordinary limit is 25% of investable funds. Investable funds = ₹200 crore − ₹40 crore = ₹160 crore. Limit = 25% × ₹160 crore = ₹40 crore. Remember: For this concentration rule, investable funds are not the same as corpus.
Hint Identify the investment base before applying the concentration percentage. Common mistake: Applying the correct percentage to corpus rather than investable funds.
XIX-A-030Practice bank se · 10
With the required consent, how far may an ordinary closed-ended AIF extend its tenure, excluding the accredited-investors-only fund exception?
The ordinary extension is up to two years with approval from two-thirds of unit holders by investment value. The question excludes the separate accredited-investors-only exception. Remember: Distinguish an ordinary scheme’s extension limit from special-category relief.
Hint Apply the ordinary extension rule rather than a special investor-class exception. Common mistake: Applying an exceptional extension period to a scheme that does not qualify.
XIX-A-031Practice bank se · 11
Why is SEBI registration alone insufficient to establish that an overseas subscription in an Indian AIF is permitted?
Applicable foreign-exchange eligibility and conditions must also be satisfied. Securities registration alone does not establish permission for every cross-border subscription. Remember: Cross-border participation must be assessed under each applicable legal framework.
Hint Consider whether one regulatory approval replaces every other applicable legal framework. Common mistake: Assuming that SEBI registration automatically satisfies foreign-exchange requirements.
XIX-A-032Practice bank se · 12
Under regulation 10(aa), AIF units must be issued in which form, subject to SEBI’s specified conditions?
Regulation 10(aa) requires AIF units to be issued in dematerialised form subject to SEBI’s conditions. A receipt or informal confirmation is not a substitute for the prescribed unit form. Remember: Unit issuance must follow the prescribed electronic holding framework.
Hint Recall how securities are held as electronic records rather than paper certificates. Common mistake: Treating a subscription payment receipt as the complete record of unit ownership.
XIX-A-033Practice bank se · 13
A distributor tells a client that registration means SEBI has approved the fund’s expected return. The fund’s materials contain investment risks and no return guarantee. Which correction is appropriate?
Registration does not mean the regulator has approved or guaranteed the expected investment return. Risk disclosures and independent assessment remain necessary. Remember: Regulatory registration is not an investment merit certificate.
Hint Separate permission to operate from a judgment about investment outcomes. Common mistake: Presenting a registration number as evidence of assured performance.
XIX-A-034Practice bank se · 14
For a newly registered angel fund under the current framework, which investors may subscribe outside the specific key-management-personnel exception?
A newly registered angel fund generally raises funds from accredited investors under the current rule. The question excludes the specific exception for key management personnel of the fund or its manager. Remember: Do not use an older angel-fund subscription threshold as a substitute for current eligibility rules.
Hint Check the current eligibility category rather than relying on an older rupee threshold. Common mistake: Repeating an old angel-fund minimum without checking later amendments.
XIX-A-035Practice bank se · 15
A Category II fund wants independent portfolio valuations annually instead of every six months. Investors holding 76% by investment value approve the change. The manager also proposes removing the independent valuer. Which proposal is consistent with regulation 23(2)?
Annual valuation is permitted with approval from at least 75% by investment value, but an independent valuer is still needed. The 76% approval satisfies the frequency condition only. Remember: An exemption from one requirement does not automatically waive a separate requirement.
Hint Separate consent to change valuation frequency from the requirement for independence. Common mistake: Treating consent to less frequent valuation as consent to self-valuation.
XIX-A-036