Investor Services
19 questions. Each answer is explained.
Question 1 of 10Practice · Series V-A — Mutual Fund Distributors
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More units in NISM Series V-A
Exam format
| Questions | 100 · 1 mark each |
|---|---|
| Duration | 120 min · 2 hours |
| Pass mark | 50% · 50 of 100 marks |
| Negative marking | None · a wrong answer costs nothing beyond the mark |
| Certificate validity | 3 years · from the date of the examination |
| Marks for this unit | Not published by NISM |
NISM Series V-A Mutual Fund Distributors
Exam rules read on NISM's site on 3 October 2026. Check the current rules on NISM's site (opens in a new tab)
What these answers assume, and when it was last checked
Each question uses the rules listed below. We last checked them on 5 September 2026. A Budget or SEBI circular can change a rate, lot size or expiry day. If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.
- NSE uses Tuesday expiry and BSE uses Thursday expiry. This applies from 1 September 2025.
- The January 2026 index lot sizes are NIFTY 65, BANKNIFTY 30, FINNIFTY 60, MIDCPNIFTY 120 and NIFTYNXT50 25.
- The October 2024 SEBI framework sets a minimum index contract value of Rs 15–20 lakh. Each exchange may list one weekly benchmark index.
- Option buyers pay the premium upfront from 1 February 2025. A short index option has an extra 2% Extreme Loss Margin on expiry day from 20 November 2024.
- Equity short-term capital gains are taxed at 20%. Long-term gains are taxed at 12.5% above Rs 1.25 lakh. Both rates apply from 23 July 2024.
- F&O income is non-speculative business income in ITR-3. NSE equity derivatives trade from 9:15 a.m. to 3:40 p.m.
- The final ten-minute session began on 3 August 2026. It aligns with the cash market Closing Auction Session.
- Most Securities Transaction Tax questions test the base and who pays. On an option sale, it is the premium and the seller pays. On a futures sale, it is the traded value and the seller pays.
- On exercise, Securities Transaction Tax uses intrinsic value: settlement price minus strike price. The buyer pays it.
- Two questions test the current rate. From 1 April 2026, option sales carry 0.15% on the premium and futures sales carry 0.05% on traded price. The earlier rates were 0.10% and 0.02% from 1 October 2024.
- This section uses the T+1 rolling settlement cycle. Obligations are fixed on T+1. A short delivery goes to buy-in auction on T+1 and settles on T+2.
- The trade-for-trade surveillance segment uses direct close-out. Funds pay in by 10:30 a.m. and pay out on or after 1:30 p.m. on settlement day.
- Securities pay in to the settlement pool by 10:30 a.m. They pay out directly to the client’s demat account by 3:30 p.m.
- The 3:30 p.m. deadline replaced 1:30 p.m. under SEBI’s 10 October 2024 circular. Direct client credit was required by SEBI’s 5 June 2024 circular.
- The optional T+0 cycle trades until 1:30 p.m. Obligations are fixed by 2:30 p.m. on the trade day. An early pay-in shortage is closed out directly.
- Cash-market Value at Risk margin is six times exponentially weighted moving-average volatility. It has a 9% floor for Group I, a 21.5% floor for Group II, and a fixed 50% or 75% level for Group III.
- Extreme Loss Margin is 3.5% for a share and 2% for a broad-market-index exchange traded fund. Mark-to-market margin is collected before the next day’s trading. The trade-for-trade segment has 100% upfront margin.
- Close-out uses the higher of the highest price from trade day to auction day and 20% above the auction day’s official close.
- A funds shortage costs 0.07% a day. The trading facility is withdrawn at a shortage of Rs 5 lakh or more.
- SCORES allows 21 calendar days, then two 15-day review levels. Online Dispute Resolution moves from conciliation to arbitration after the market participant and SCORES steps.
- At NSE, the Investor Protection Fund limit is Rs 35 lakh per investor for each defaulting or expelled member. This applies to claims arising after 13 August 2024.
- A Basic Services Demat Account has no annual maintenance charge up to Rs 4 lakh of holdings. It costs up to Rs 100 above that, until the Rs 10 lakh eligibility ceiling. These slabs apply from 1 September 2024.
- The rupee pairs are USD-INR, EUR-INR, GBP-INR and JPY-INR. The cross-currency pairs are EUR-USD, GBP-USD and USD-JPY.
- Each contract covers 1,000 units of the foreign currency, except JPY-INR. JPY-INR covers 100,000 yen and is quoted in rupees per 100 yen.
- The tick is 0.25 paise, or Rs 0.0025. It equals Rs 2.50 a contract.
- Rupee pairs trade from 9:00 a.m. to 5:00 p.m. A monthly contract stops trading at 12:30 p.m. two working days before the expiry month’s last business day.
- Final settlement is in cash at the FBIL reference rate on expiry day. FBIL, Financial Benchmarks India, has published this rate in place of the Reserve Bank since 2018. Premium-style European options are quoted in rupees. The buyer pays the premium in cash on T+1.
- Daily settlement is on T+1 and final settlement is on T+2.
- NSE Clearing circular 026/2020 sets SPAN margin plus Extreme Loss Margin. The futures margin is 0.50% for USD-INR, 0.15% for EUR-INR, 0.25% for GBP-INR and 0.35% for JPY-INR. A short option has 0.75%. These figures apply from 1 June 2020.
- A USD-INR client may hold 6% of total open interest or USD 20 million, whichever is higher. A trading member may hold 15% or USD 100 million.
- A resident user has one USD 100 million equivalent limit across all rupee pairs and exchanges. No document is needed below that limit, but a valid underlying contracted exposure must still exist. This clarification applies from 3 May 2024.
- The currency segment has no Securities Transaction Tax.
The exam figures (questions, time, pass mark, negative marking and certificate validity) come from NISM's own pages, read on 3 October 2026. Timed practice uses the same figures. Study with the official workbook as well.
The written-out answers on this page are hidden while your timed set runs.
All 19 questions on Investor Services, with answers
Q1For an ordinary ₹1 lakh equity-fund purchase on a business day, which situation qualifies for that day’s closing NAV? Times refer to the official acceptance point and availability to the scheme.
Option A. Valid application at 2:30 pm and usable funds at 2:45 pm — Correct answer
Option B. Valid application at 3:15 pm and usable funds at 2:30 pm
Why it is wrong: Money is available in time, but the valid application arrives after the cut-off.
Option C. Valid application at 2:30 pm and bank debit at 2:45 pm, with scheme receipt the next day
Why it is wrong: A debit to the investor’s account is not proof that the scheme can use the money that day.
Option D. Valid application at 2:30 pm and usable funds at 3:15 pm
Why it is wrong: The application is timely, but the scheme does not have usable funds by the cut-off.
Answer: A. Both the application and money available for use meet the 3 pm cut-off. The ordinary equity-fund purchase cut-off is 3 pm. The question gives official receipt times, not the time an investor began filling a form. Check the application and funds separately. Only the 2:30 pm application with funds usable at 2:45 pm meets both conditions. The ₹1 lakh amount does not remove the realisation requirement. A bank debit or an instruction to pay is not the same as usable money in the scheme. Remember: For a purchase NAV question, track two clocks: valid application receipt and usable-funds availability.
Hint, shown before you answer in practice mode: Common mistake: Checking only the application time or assuming that a small purchase gets same-day NAV before funds arrive.
VA-013mediumapplication
Q2Which pair correctly gives the liquid-fund PURCHASE cut-off and the ONLINE overnight-fund REDEMPTION cut-off, respectively? Use scheme-level rules, not an intermediary’s earlier processing deadline.
Option A. 3:00 pm and 3:00 pm
Why it is wrong: It substitutes the familiar 3 pm time for two transactions whose stated cut-offs differ.
Option B. 1:30 pm and 3:00 pm
Why it is wrong: The liquid purchase time is right, but this overlooks the 7 pm provision for online overnight redemptions.
Option C. 1:30 pm and 7:00 pm — Correct answer
Option D. 3:00 pm and 7:00 pm
Why it is wrong: The overnight online-redemption time is right, but 3 pm is not the liquid purchase cut-off.
Answer: C. The liquid purchase cut-off is 1:30 pm. The April 2025 SEBI circular sets 7 pm for online overnight redemptions. First identify the liquid-fund transaction as a purchase. Its cut-off is 1:30 pm, subject also to the applicable fund-availability requirements. Next identify the overnight-fund transaction as an online redemption. SEBI’s April 2025 circular specifies 7 pm for that combination, effective from 1 June 2025. The 7 pm rule does not turn liquid purchases or all mutual fund transactions into evening transactions. This question asks for cut-off times, not the resulting NAV date. Remember: Identify category, transaction direction and channel before selecting a cut-off time.
Hint, shown before you answer in practice mode: Common mistake: Applying a redemption exception to purchases, or assuming that every mutual fund transaction uses 3 pm.
VA-014mediumregulatory
Q3A first-time resident individual wants to make a ₹500 mutual fund investment and has not completed KYC. The scheme accepts that investment amount. Which statement is correct?
Option A. A bank account automatically replaces mutual fund KYC
Why it is wrong: A bank account is relevant to payment, but its existence does not by itself establish the required mutual fund KYC compliance.
Option B. The investor must complete the applicable KYC requirements — Correct answer
Option C. KYC is unnecessary because the investment amount is small
Why it is wrong: A small accepted investment amount does not create a general exemption from the applicable KYC requirements.
Option D. KYC can always be deferred until the investor redeems
Why it is wrong: The investor should not assume an unconditional right to postpone purchase-related KYC requirements until redemption.
Answer: B. KYC applies to the investor. A small accepted purchase amount does not by itself waive it. The question states that the investor has not completed KYC. It does not describe an investor whose existing valid KYC can be used. The fact that ₹500 is accepted as a purchase amount answers a minimum-subscription question, not the KYC question. The investor must follow the applicable KYC process instead of relying on the small amount, a bank account or a future redemption date. Remember: Separate minimum investment eligibility from investor-identification compliance.
Hint, shown before you answer in practice mode: Common mistake: Confusing a small-ticket or documentation concession with a blanket exemption from KYC.
VA-023easyregulatory
Q4A sole mutual fund unitholder names a nominee but gives that person no separate operating authority. What is the main purpose of the nomination?
Option A. To let the nominee change the investor’s scheme choices immediately
Why it is wrong: An investment-management or transaction authority is different from a nomination.
Option B. To help identify the person for transmission after the unitholder’s death — Correct answer
Option C. To let the nominee redeem units for personal use while the holder is alive
Why it is wrong: Nomination alone is not an operating mandate. The question expressly excludes a separate authority.
Option D. To make the nominee a joint holder immediately
Why it is wrong: Naming a nominee is not the same transaction as adding a joint holder.
Answer: B. Nomination helps the transmission process following the holder’s death. It does not itself make the nominee a present joint owner or operator. The folio has a sole holder and the nominee has no separate operating authority. SEBI’s May 2026 nomination circular describes nomination as helping identify the person for transfer and facilitating transmission after the investor’s death. The nomination therefore does not by itself give immediate ownership or a right to operate the folio. The question does not ask how a succession-law dispute between claimants would be resolved. Remember: Distinguish a nominee for transmission from a joint holder or authorised operator.
Hint, shown before you answer in practice mode: Common mistake: Assuming that being named as nominee gives an immediate right to redeem or manage the investor’s units.
VA-028easyconceptual
Q5Under SEBI’s 14 February 2025 CAS circular, by which day after month-end must a depository issue the MONTHLY ELECTRONIC CAS for a month with transactions?
Option A. The 12th day — Correct answer
Option B. The 15th day
Why it is wrong: The cited circular uses this deadline for physical monthly CAS, not electronic monthly CAS.
Option C. The 5th day
Why it is wrong: This is the revised date for AMCs/RTAs to provide the relevant data to depositories, not the depository’s electronic issue deadline.
Option D. The 10th day
Why it is wrong: This repeats the earlier electronic CAS timeline that the cited circular revises.
Answer: A. The circular sets the depository’s electronic monthly CAS deadline at the 12th day after month-end. The question specifies a depository-issued statement, not every statement an AMC or RTA may send. It also specifies a monthly electronic statement for a transaction month, not a physical or half-yearly statement. For that combination, the February 2025 circular gives the 12th day after month-end. Data collection and physical dispatch have different deadlines. Remember: Before recalling a CAS date, identify the issuer, monthly or half-yearly period, and electronic or physical delivery.
Hint, shown before you answer in practice mode: Common mistake: Using one familiar CAS deadline for every issuer and delivery format.
VA-037mediumregulatory
Q6An investor’s half-yearly CAS reports ₹600 as gross distributor commission and separately reports the plan’s average TER. Which interpretation is correct?
Option A. ₹600 must be deducted again from the holding value because TER is shown separately
Why it is wrong: Reading a cost disclosure does not mean the investor should manually deduct it again from a NAV-based holding value.
Option B. ₹600 is the disclosed gross commission, not the distributor’s profit after business costs — Correct answer
Option C. ₹600 is the minimum commission promised for the next half-year
Why it is wrong: The disclosure concerns commission for the reported period, not a forecast or a promise for a future period.
Option D. ₹600 is the distributor’s profit after deducting business costs
Why it is wrong: The word gross means the disclosure has not made those deductions.
Answer: B. Gross commission is not net profit. The separate TER disclosure is an expense-ratio measure, not a second bill to deduct from the stated holding value. Read the label attached to the ₹600 amount. It is reported as gross distributor commission for the half-year. Gross does not mean what remains after the distributor’s operating costs. Those costs cannot be inferred from this statement. The plan’s average TER is a separate disclosure. Neither field by itself instructs the investor to reduce the already reported NAV-based holding value again. Remember: Read commission and TER as distinct disclosures, and do not convert gross commission into net profit or double-count an expense.
Hint, shown before you answer in practice mode: Common mistake: Treating disclosed commission as the distributor’s take-home profit, or deducting disclosed costs a second time.
VA-038mediumapplication
Q7An investor has already complained to the AMC’s designated grievance officer but is dissatisfied with the response. For an eligible complaint about the mutual fund service, which is the appropriate SEBI grievance platform?
Option A. RBI’s complaint platform solely because payment used a bank account
Why it is wrong: Using a bank account to pay does not turn an AMC-service complaint into a banking-service complaint.
Option B. The stock exchange’s trading-member grievance portal
Why it is wrong: The question concerns the AMC’s mutual fund service, not a separate complaint about an exchange trading member.
Option C. SCORES — Correct answer
Option D. AMFI’s industry-association complaint channel
Why it is wrong: AMFI is an industry association. Its channel is not the SEBI grievance platform specifically requested here.
Answer: C. SCORES is SEBI’s grievance platform. The investor has already taken the required first step of approaching the entity. The disputed service belongs to the mutual fund/AMC. The question does not describe a separate bank-service failure. The investor has already approached the AMC’s designated grievance officer. SCORES is the relevant SEBI platform for an eligible unresolved securities-market complaint. Submission does not guarantee a particular result or compensation. Remember: Identify the complaint’s subject and first approach the responsible entity before using the relevant regulator’s grievance route.
Hint, shown before you answer in practice mode: Common mistake: Choosing a complaint authority based only on the payment channel rather than the service complained about.
VA-039easyapplication
Q8An eligible monetary dispute with an AMC remains unresolved after the investor has approached the AMC and used SCORES. No court or other forum is considering it. Which statement correctly describes SMART ODR?
Option A. It only forwards the complaint to the AMC and provides no dispute-resolution process
Why it is wrong: This confuses simple complaint forwarding with SMART ODR’s conciliation and arbitration functions.
Option B. It provides conciliation but excludes arbitration for covered disputes
Why it is wrong: This identifies only part of the process and incorrectly rules out its arbitration stage.
Option C. It requires an arbitral award before the parties can attempt conciliation
Why it is wrong: This reverses the relationship between attempting settlement and proceeding to arbitration when needed.
Option D. It can use conciliation to seek settlement and arbitration if needed — Correct answer
Answer: D. The ODR process includes these distinct stages for eligible disputes. Access to the process does not guarantee a particular result. The scenario specifies that the investor has approached the entity and that the dispute is eligible for the stated route. SMART ODR covers the relevant securities-market entities, including mutual funds and AMCs. Conciliation seeks a settlement. Where the process requires it, arbitration provides a formal determination. Accessing the platform does not guarantee that the investor will win. The scenario includes prior SCORES use, but this does not mean that exhausting SCORES is a universal prerequisite for every ODR matter. Remember: Distinguish a complaint portal from a process for conciliation and arbitration.
Hint, shown before you answer in practice mode: Common mistake: Assuming that an unresolved complaint automatically becomes an arbitration case or guarantees compensation.
VA-040mediumapplication
Q9A valid equity-fund purchase application reaches the official acceptance point on Monday at 2 pm. The money becomes usable by the scheme on Tuesday at 3:10 pm and remains available thereafter. Monday, Tuesday and Wednesday are all business days. Which closing NAV applies?
Option A. Wednesday’s closing NAV — Correct answer
Option B. Monday’s closing NAV
Why it is wrong: A timely application alone cannot give Monday’s NAV when funds are unavailable to the scheme.
Option C. Tuesday’s closing NAV
Why it is wrong: The money becomes usable at 3:10 pm, which misses the Tuesday cut-off.
Option D. Thursday’s closing NAV
Why it is wrong: Nothing in the scenario requires an additional day after the conditions are met on Wednesday.
Answer: A. Monday has the application but not the funds. Tuesday’s fund availability is after the cut-off. Wednesday is the first day when both requirements are met in time. Monday: the 2 pm application is in time, but no usable funds are present. Monday therefore does not qualify. Tuesday: funds arrive at 3:10 pm, after the 3 pm cut-off. Tuesday does not qualify either. Wednesday: the valid application is already lodged and the money remains usable before 3 pm. Wednesday’s closing NAV therefore applies. Remember: When funds miss a day’s cut-off, move to the next eligible business day and check the conditions again.
Hint, shown before you answer in practice mode: Common mistake: Using the calendar date of realisation without checking the time of realisation.
VA-041mediumapplication
Q10Three SIP instalments of ₹3,000 each are fully invested at NAVs of ₹10, ₹12 and ₹15. With no charges or redemptions, what is the average acquisition cost per unit?
Option A. ₹12.33
Why it is wrong: This is the rounded simple average of the three NAVs. Equal rupee instalments buy unequal unit quantities, so that is not the acquisition cost per unit.
Option B. ₹12.00 — Correct answer
Option C. ₹10.00
Why it is wrong: This uses only the first purchase NAV and ignores the units bought at the other two prices.
Option D. ₹15.00
Why it is wrong: This uses the final purchase NAV rather than dividing the combined acquisition cost by the combined units.
Answer: B. The instalments buy 300, 250 and 200 units, or 750 units in total. Total cost ₹9,000 divided by 750 units is ₹12. The first instalment buys ₹3,000 / ₹10 = 300 units. The next two buy ₹3,000 / ₹12 = 250 units and ₹3,000 / ₹15 = 200 units. Total money invested is ₹9,000 and total units are 300 + 250 + 200 = 750. Average acquisition cost per unit = ₹9,000 / 750 = ₹12.00. This calculation describes the cost of the acquired units. It does not establish that SIP investing guarantees a profit or that any future NAV will exceed that cost. Remember: For a SIP’s average unit cost, total the actual units before dividing total investment by them.
Hint, shown before you answer in practice mode: Common mistake: Averaging NAVs without recognising that equal money buys more units at lower prices.
VA-072mediumnumerical
Q11An investor holds 1,000 units at NAV ₹42 immediately before a ₹2-per-unit IDCW distribution. The full distribution is reinvested at the ex-distribution NAV. Assume NAV falls by exactly the distribution amount and ignore taxes, charges and market movement. What are the resulting units and investment value?
Option A. 1,000 units worth ₹40,000
Why it is wrong: This reflects the lower NAV but fails to reinvest the distribution into 50 extra units.
Option B. 1,050 units worth ₹42,000 — Correct answer
Option C. 1,050 units worth ₹44,100
Why it is wrong: This values the increased unit count at the old ₹42 NAV, effectively counting the distribution twice.
Option D. 1,047.619 units worth approximately ₹41,904.76
Why it is wrong: This divides ₹2,000 by the old ₹42 NAV instead of the specified ex-distribution ₹40 NAV.
Answer: B. The ₹2,000 reinvestment buys 50 units at ₹40 and total value remains ₹42,000 under the assumptions. The distribution is 1,000 × ₹2 = ₹2,000. The ex-distribution NAV is ₹42 − ₹2 = ₹40. New units = ₹2,000 ÷ ₹40 = 50. Total units after reinvestment = 1,000 + 50 = 1,050. The resulting value is 1,050 × ₹40 = ₹42,000, equal to the pre-distribution value. No separate ₹2,000 cash payout should be added because that amount has already purchased the 50 extra units. Remember: Reinvestment increases units at the applicable ex-distribution NAV, not at the old NAV.
Hint, shown before you answer in practice mode: Common mistake: Using the pre-distribution NAV or counting both the reinvested amount and a cash payout.
VA-093hardnumerical
Q12Under the minor-to-major provisions in SEBI’s March 2026 mutual fund master circular, what happens to a SIP registered in a minor’s folio when the unitholder becomes a major but has not completed the required status update?
Option A. It continues because the guardian’s original mandate remains sufficient after majority.
Why it is wrong: The original guardian mandate does not override the change in the unitholder’s status.
Option B. Only additional lump-sum purchases stop, while the existing SIP continues unchanged.
Why it is wrong: The cited suspension expressly covers systematic instructions. It is not limited to new lump-sum applications.
Option C. It continues as soon as a nominee is added, even without the status and KYC update.
Why it is wrong: Adding a nominee does not satisfy the required major-status, KYC and bank-account formalities.
Option D. It is suspended until the required major-status, KYC and bank-account formalities are completed. — Correct answer
Answer: D. This follows the stated minor-to-major requirements and suspension of systematic instructions. The question specifically states that the minor-to-major update is incomplete. The cited provisions require the unitholder’s status and the associated KYC and bank details to be updated. The stated systematic-transaction provision suspends instructions such as SIPs on attainment of majority until the required formalities are completed. Nomination is not a substitute for that update. Remember: Check a folio’s change of status before assuming an existing systematic mandate can keep operating.
Hint, shown before you answer in practice mode: Common mistake: Assuming a mandate signed during minority remains sufficient after the investor becomes a major.
VA-095mediumregulatory
Q13Under SEBI’s March 2026 mutual fund master circular, a parent makes a permitted subscription into a minor’s folio from the parent’s sole bank account. Where must subsequent redemption proceeds be credited, after the required checks?
Option A. To the parent’s sole bank account because it funded the subscription.
Why it is wrong: A permitted payment source does not automatically become the permitted redemption destination.
Option B. To the legal guardian’s sole bank account once that guardian’s KYC is complete.
Why it is wrong: The guardian’s completed KYC does not turn the guardian’s sole account into the required verified minor account.
Option C. To the minor’s verified bank account, including one held with the parent or legal guardian. — Correct answer
Option D. To an unverified account in the minor’s name, relying only on the folio’s existing KYC.
Why it is wrong: Naming the minor on an account does not eliminate the verification requirement for the payout bank account.
Answer: C. This retains the required verified minor-account condition while allowing the stated joint-account arrangement. The question assumes the parent-funded subscription was valid. It does not need to be rejected merely because the parent supplied the money. The cited redemption provision requires payment to the minor’s verified bank account, including a permitted account held with the parent or legal guardian, after completing the stated checks. Funding the purchase does not by itself make the parent’s sole account the correct redemption account. Remember: For a minor’s folio, check the purchase-payment rule and redemption-bank rule separately.
Hint, shown before you answer in practice mode: Common mistake: Assuming redemption must go back to the same sole account from which a parent paid.
VA-096mediumregulatory
Q14An investor owns 5,000 units. The folio record shows 2,000 units under a bank’s lien and 3,000 free units. Under the stated lien terms, lien-marked units need the bank’s release before redemption. A request redeems 2,500 free units. With no other restriction or transaction, how many free units remain?
Option A. 500 units — Correct answer
Option B. 2,500 units
Why it is wrong: This is the remaining total holding. It incorrectly treats the 2,000 lien-marked units as free.
Option C. 2,000 units
Why it is wrong: This is the unchanged lien-marked balance, not the free balance.
Option D. 3,000 units
Why it is wrong: This is the opening free balance and ignores the 2,500-unit redemption.
Answer: A. This is the remaining free balance after deducting the redemption from the 3,000 free units. The opening free balance is 3,000 units. The separate 2,000 units under lien are not included in that free balance. The request uses 2,500 of the free units, leaving 3,000 − 2,500 = 500 free units. The total remaining holding is 5,000 − 2,500 = 2,500 units. It consists of 2,000 lien-marked units plus 500 free units. Redeeming free units does not itself release the lien on the other units. Remember: After a redemption, reconcile total units into the lien-marked and free balances separately.
Hint, shown before you answer in practice mode: Common mistake: Using the total holding as the available balance even though some units remain under lien.
VA-113mediumnumerical
Q15An investor is asked to complete a FATCA/CRS self-certification as part of the applicable account documentation. What information is this process principally intended to establish?
Option A. The investor’s preferred equity allocation
Why it is wrong: An equity-allocation preference belongs to investment suitability and risk profiling, not the central purpose of this tax self-certification.
Option B. The investor’s desired nomination arrangement
Why it is wrong: Nomination records the person designated for the relevant transmission process. That is a separate account instruction.
Option C. The distributor’s applicable commission band
Why it is wrong: A distributor’s commission band concerns remuneration, not the investor’s tax-reporting status.
Option D. The investor’s relevant tax status for reporting — Correct answer
Answer: D. Relevant tax status is the reason for requesting this form and its related reporting information. The form belongs to a tax-information and reporting process. It seeks the status and related particulars needed under that process. It is separate from a risk-profile questionnaire, a nomination instruction and a distributor-remuneration disclosure. Tax status should be determined using the applicable form and rules. It should not be guessed solely from a mailing address or investment preference. Remember: Recognise the purpose of each onboarding document before deciding what information it should contain.
Hint, shown before you answer in practice mode: Common mistake: Assuming a tax self-certification replaces either the investor’s risk assessment or the nomination form.
VA-114easyconceptual
Q16A company’s mutual fund account checklist requires both completed entity KYC and a certified board resolution authorising investment and naming the authorised signatories. KYC is complete. The application is signed, but no such authority document is provided. Which missing document directly addresses the stated gap?
Option A. The personal risk questionnaire completed by the proposed signatory
Why it is wrong: A personal risk questionnaire does not establish authority to act on behalf of the company.
Option B. The certified board resolution naming the authorised signatories — Correct answer
Option C. The company’s investment performance report for the latest year
Why it is wrong: An investment report describes results or holdings. It does not confer signing authority.
Option D. The distributor’s commission disclosure statement for the scheme
Why it is wrong: Commission disclosure addresses an incentive conflict. It is not proof that the applicant may bind the company.
Answer: B. This supplies the precise investment and signatory authorisation required by the scenario’s checklist. The stem states that entity KYC is already complete, so repeating the identity documents does not resolve the specified missing authority. The account checklist separately requires a certified board resolution authorising the investment and identifying the signatories. A signed application alone does not supply that missing evidence under the stated checklist. The required resolution directly addresses the gap. Remember: For institutional applications, distinguish who the entity is from who may authorise and sign its transactions.
Hint, shown before you answer in practice mode: Common mistake: Assuming that completing entity KYC automatically proves every employee’s authority to invest for the entity.
VA-115mediumapplication
Q17A folio has two adult holders and an operating mandate that requires BOTH holders to authorise redemptions. Neither has granted a power of attorney. A redemption request is signed only by the first holder. What is the relevant processing issue?
Option A. The first holder’s signature is sufficient because that holder receives statements
Why it is wrong: Being the first holder or statement recipient does not override the explicitly stated joint-authorisation condition.
Option B. A nominee’s signature can replace the second holder’s authorisation
Why it is wrong: A nomination does not supply operating authority during the holders’ lifetimes in this scenario.
Option C. The request lacks the second authorisation required by the mandate — Correct answer
Option D. The request becomes valid merely because the payout bank account is verified
Why it is wrong: Bank verification addresses the payment destination, not whether the holders authorised the transaction.
Answer: C. The second holder’s required authorisation is missing. The hypothetical mandate explicitly requires both holders to authorise a redemption. Only one authorisation is present and no separate authority can substitute. The missing authorisation must be addressed before the request meets that mandate. Remember: Read the operating mandate before deciding whose authorisation is required.
Hint, shown before you answer in practice mode: Common mistake: Assuming every multi-holder folio operates on an either-or-survivor basis.
VA-141mediumapplication
Q18An AMC confirms that an investor’s SIP cancellation is effective before the next scheduled purchase. The investor gives no redemption or switch instruction. What happens to the units already allotted through earlier instalments?
Option A. They stay invested unless a separate valid disposal or other applicable event occurs — Correct answer
Option B. They are automatically redeemed at the cancellation-day NAV and the money is paid out
Why it is wrong: Redemption is a separate transaction. The cancellation does not request it.
Option C. They are refunded to the investor’s bank account at their original acquisition cost
Why it is wrong: An acquisition-cost refund is not created by cancelling future instalments.
Option D. They are automatically switched to the scheme’s IDCW option so that payouts can start
Why it is wrong: Changing an option requires a relevant instruction or other applicable process. No such change is given.
Answer: A. This separates the future purchase instruction from the units already owned. The cancellation stops the future scheduled purchases described in the stem. The earlier units are already an investment holding. No redemption, switch or other disposal is specified, so the cancellation alone leaves those units invested. Remember: Stopping future investments and withdrawing existing investments are separate decisions.
Hint, shown before you answer in practice mode: Common mistake: Using “stop SIP” and “redeem the folio” as though they mean the same transaction.
VA-142easyapplication
Q19Which request is a non-financial folio-maintenance transaction rather than a purchase, redemption or switch of units?
Option A. An additional purchase in the existing folio
Why it is wrong: An additional purchase allocates money to units and is a financial transaction.
Option B. A switch from one scheme to another
Why it is wrong: A scheme switch involves an investment transaction rather than only a record update.
Option C. A redemption under an SWP
Why it is wrong: An SWP withdrawal redeems units. Its scheduled nature does not alter that classification.
Option D. An update to the registered payout bank details — Correct answer
Answer: D. The bank-detail update is folio maintenance and does not itself dispose of or acquire units. Updating registered bank details changes a folio attribute used for future payments. The other three choices change the unit investment through purchase, redemption or a switch. Calling a redemption systematic does not make it non-financial. Remember: Classify the request by what changes: account details or the unit investment.
Hint, shown before you answer in practice mode: Common mistake: Treating a service request as non-financial merely because it is automated.
VA-143easyconceptual
Investor Services: common questions
How many practice questions are there on Investor Services?
19 questions, all written out on this page with the correct answer and why each other option is wrong. This unit is one of the 8 practice topics for NISM Series V-A, which has 150 questions in total.
Are these real NISM Series V-A questions on Investor Services?
No. LearnNifty wrote every question from NISM's public syllabus. NISM does not publish its question bank, so nobody can offer you the real paper. Use these questions to check that an idea has gone in. Use the official NISM workbook to see what is examined.
Does negative marking apply to NISM Series V-A?
No. NISM applies no negative marking to Series V-A. A wrong answer costs nothing beyond the mark you did not earn, so a blank is never better than an attempt. Timed practice here uses the same rule.
Are these practice questions kept up to date?
Each question is written against the rules printed on this page, last checked on 5 September 2026. A Budget or a SEBI circular can change a rate, a lot size or an expiry day. If one of those rules changes before your exam, treat the questions that use it as out of date. Then check NISM's current workbook.
Risk, Return and Performance
21 questions on Risk, Return and Performance. Its quiz opens on that unit.
Open Risk, Return and Performance