Scheme Related Information
7 questions. Each answer is explained.
Question 1 of 7Practice · Series V-D — Mutual Fund - Specialized Investment Fund Distributors
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Learn these topics
More units in NISM Series V-D
- The Investment Landscape5
- Concept & Role of a Mutual Fund4
- Legal Structure of Mutual Funds in India3
- Legal and Regulatory Framework7
- Fund Distribution and Channel Management Practices4
- Net Asset Value, Total Expense Ratio and Pricing of Units5
- Taxation3
- Investor Services10
- Risk, Return and Performance of Funds5
- Mutual Fund Scheme Performance5
- Mutual Fund Scheme Selection10
- Basics of Derivatives10
- Understanding Index5
- Introduction to Forwards and Futures15
- Introduction to Options13
- Strategies Using Equity Futures and Equity Options9
- Introduction to Interest Rate, Interest Rate Instruments and Fixed Income Markets6
- Interest Rate Derivatives2
- Exchange Traded Interest Rate Futures10
- Exchange Traded Interest Rate Options6
- Strategies Using Interest Rate Derivatives6
Exam format
| Questions | 150 · 1 mark each |
|---|---|
| Duration | 180 min · 3 hours |
| Pass mark | 60% · 90 of 150 marks |
| Negative marking | 10% · 0.1 marks off per wrong answer |
| Certificate validity | 3 years · from the date of the examination |
| Marks for this unit | 7 of 150 marks (4.7%) |
Source: July 2026 Annexure I, Chapter 5: Scheme Related Information
NISM Series V-D Mutual Fund - Specialized Investment Fund Distributors
Exam rules read on NISM's site on 30 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 If a rule changes before your exam, treat the linked questions as out of date and check NISM's current workbook.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 30 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 7 questions on Scheme Related Information, with answers
Q1An investor wants the detailed investment objective, asset-allocation approach and principal risks of a particular scheme. Which document is the most direct starting point?
Option A. Statement of Additional Information (SAI) alone
Why it is wrong: The SAI mainly provides common fund-level information. The detailed scheme mandate and risks should be read in the SID.
Option B. Scheme Information Document (SID) — Correct answer
Option C. The AMC’s corporate annual report alone
Why it is wrong: Corporate financial reporting does not replace the particular scheme’s detailed investment terms.
Option D. Key Information Memorandum (KIM) alone
Why it is wrong: The KIM summarises key information, while the question asks for the detailed scheme document.
Answer: B. The SID sets out key details of the scheme, including its objective and risk-related information. The investor should also check relevant updates and accompanying documents. Remember: Read the scheme’s own terms before making a selection.
Hint, shown before you answer in practice mode: Choose the document centred on the particular scheme.
V-D-020easyapplication
Q2Which document generally contains common information about the mutual fund’s constitution, management and related legal matters, supplementing scheme-level information?
Option A. Scheme Information Document (SID)
Why it is wrong: The SID focuses on the particular scheme. SAI is the common-information document described.
Option B. Statement of Additional Information (SAI) — Correct answer
Option C. Key Information Memorandum (KIM)
Why it is wrong: The KIM provides a concise summary of important scheme information.
Option D. A monthly portfolio factsheet of the scheme
Why it is wrong: A factsheet focuses on current scheme information and performance rather than replacing the fund’s common legal-information document.
Answer: B. The SAI provides common information that accompanies the scheme documents. It should be read with the SID and relevant updates, rather than treated as a substitute for scheme-specific details. Remember: Use SID and SAI together to understand scheme and fund-level information.
Hint, shown before you answer in practice mode: Distinguish information common to the fund from information specific to one scheme.
V-D-021easyconceptual
Q3What is the main purpose of a Key Information Memorandum (KIM)?
Option A. To provide the complete accounting ledger for every scheme transaction
Why it is wrong: A KIM is an investor-information summary, not a full transaction ledger.
Option B. To replace every detailed scheme document and later update
Why it is wrong: A summary does not remove the need to consult full terms and applicable updates.
Option C. To provide a concise summary of important scheme information for an investor — Correct answer
Option D. To serve solely as the mutual fund’s trust deed
Why it is wrong: The trust deed establishes the trust. A KIM summarises key scheme information.
Answer: C. The KIM presents important scheme information in a shorter form. A material decision may still require the SID, SAI and applicable addenda. Remember: A concise disclosure helps orientation but should not be mistaken for the entire contract.
Hint, shown before you answer in practice mode: The word “key” points to a summary of essential information.
V-D-022easyconceptual
Q4A printed SID from an earlier date states an exit-load term. The AMC’s authenticated later addendum changes that term for investments made from a specified date. A purchase falls after that effective date. What should the distributor use? Assumptions: The later addendum is authenticated and legally applicable to the purchase described.
Option A. The SID read together with the applicable later addendum — Correct answer
Option B. Only the printed SID, because printed documents always override later updates
Why it is wrong: A valid, applicable update must be considered.
Option C. Whichever exit-load term produces the highest sales conversion
Why it is wrong: Commercial convenience does not determine the governing terms.
Option D. The load of another fund in the same category
Why it is wrong: Another scheme’s terms do not establish this scheme’s load.
Answer: A. An addendum updates the relevant part of the scheme information. Using the old statement alone would overlook the terms applicable to the stated purchase. Remember: Document version and effective date can change the answer.
Hint, shown before you answer in practice mode: Check authenticity, effective date and applicability to the transaction.
V-D-023mediumconceptual
Q5A distributor compares two schemes using a current expense-ratio disclosure for Fund A and a two-year-old disclosure for Fund B. What is the best correction before presenting a cost comparison?
Option A. Use the older value because fees can never change
Why it is wrong: Expense ratios can change and should be checked for the relevant date and plan.
Option B. Compare A’s direct plan with B’s regular plan without explaining the difference
Why it is wrong: Different plan structures can distort the comparison if not made explicit.
Option C. Obtain comparable, current expense disclosures for the exact plans being compared — Correct answer
Option D. Replace both expense ratios with the funds’ NAVs
Why it is wrong: NAV level is not an expense-ratio measure.
Answer: C. The comparison should use current information for the actual plans under consideration. Mixing dates or plan types can attribute a cost difference to the wrong cause. Remember: Check both document freshness and the identity of the plan.
Hint, shown before you answer in practice mode: A fair comparison needs consistent dates and comparable plan types.
V-D-024mediumapplication
Q6An investor owns three funds with different names. Their latest portfolio disclosures show that the same five companies dominate all three portfolios. What can these disclosures reveal?
Option A. The number of folios alone establishes diversification
Why it is wrong: Folio count does not show what securities are held.
Option B. Three fund names necessarily mean three independent sources of risk
Why it is wrong: Different labels do not eliminate shared holdings.
Option C. The investor may have substantial overlapping underlying exposures — Correct answer
Option D. The overlap proves that every holding will rise together tomorrow
Why it is wrong: Shared exposure does not establish a certain future price move.
Answer: C. Portfolio disclosures help identify repeated security and sector exposures across funds. Diversification should be assessed at the combined underlying portfolio level. Remember: Many funds can still create one concentrated economic exposure.
Hint, shown before you answer in practice mode: Look through the fund wrappers to their underlying investments.
V-D-025mediumapplication
Q7A fictional SIF strategy document permits long and short equity positions and warns of leverage-related losses. A distributor’s summary describes it simply as “a safer mutual-fund alternative”. What information must be restored to make the summary useful? Assumptions: This is a fictional SIF mandate for a disclosure exercise. It asserts no statutory leverage limit or investor threshold.
Option A. The strategy’s actual exposures, potential losses, liquidity terms and suitability considerations — Correct answer
Option B. A promise that the short positions in the strategy will prevent all losses for the investor
Why it is wrong: Short positions can introduce risk and do not guarantee protection.
Option C. Only the best historical month’s return, shown without any risk or loss information
Why it is wrong: A selected return observation omits the strategy’s risk and liquidity characteristics.
Option D. Only the strategy name and minimum ticket size mentioned by the salesperson in the meeting
Why it is wrong: A label and sales summary do not communicate the stated economic risks.
Answer: A. The supplied document describes a strategy with exposures that require clear explanation. A useful summary must reflect those terms and assess the intended investor’s ability to understand and bear the risks. Remember: Explain a SIF using its actual strategy and terms rather than a reassuring label.
Hint, shown before you answer in practice mode: The product label cannot substitute for its disclosed mandate and risks.
V-D-026mediumconceptual
Scheme Related Information: common questions
How many practice questions are there on Scheme Related Information?
7 questions, all written out on this page with the correct answer and why each other option is wrong. This unit is one of the 22 practice topics for NISM Series V-D, which has 150 questions in total.
Are these real NISM Series V-D questions on Scheme Related Information?
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.
How much of the NISM Series V-D exam is Scheme Related Information?
NISM's published syllabus outline gives it 7 of the paper's 150 marks, or 4.7% of the exam. It is quoted from the outline, not estimated. The published unit it comes from: July 2026 Annexure I, Chapter 5: Scheme Related Information
Does negative marking apply to NISM Series V-D?
Yes. NISM takes off 10% of a question's marks for a wrong answer. On a 1-mark question that is 0.1 marks off. A blank question earns nothing and loses nothing, so a wrong guess costs marks on this paper. 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.
Fund Distribution and Channel Management Practices
4 questions on Fund Distribution and Channel Management Practices. Its quiz opens on that unit.
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