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NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors

Scheme Related Information for NISM Mutual Fund Distributors

Scheme Related Information covers the documents, rules and procedures that describe a mutual fund scheme: SID, SAI, KIM, fact sheets, NFOs, SEBI scheme categories, fundamental attributes, mergers and unitholder rights. You solve questions by knowing which document holds which information and the exact rule or condition for each event.

What this chapter covers

This chapter explains how a mutual fund scheme is described to investors and how it is regulated over its life. It starts with the documents: the Scheme Information Document (SID), the Statement of Additional Information (SAI) and the Key Information Memorandum (KIM). It then moves to the fund fact sheet, the New Fund Offer (NFO), SEBI's scheme categories, and what happens when a scheme changes, merges or closes.

The chapter links to the rest of the paper in three ways. Scheme types and categories build on what you learn about fund types and asset classes. NFO and allotment rules connect to transaction and NAV topics. The disclosure and unitholder rights material connects to the legal and regulatory chapters and to a distributor's duty to explain a scheme fairly.

Most questions here are factual. They ask which document contains what, what a category must hold, or what right a unitholder gets when something changes. You score by recalling precise rules and not by calculating.

This chapter is full of definitions, conditions and limits, which is exactly what a multiple-choice paper tests. Questions are direct, so well-prepared students pick up easy marks. Weak students lose them to look-alike options, such as SID versus SAI or fundamental versus non-fundamental changes. V-A has no negative marking, so always attempt every question. The same facts also help in real client conversations, where you must explain a scheme from its documents and not from memory.

Scheme Related Information: topics in the order to study them

  1. 1Scheme Related Documents: SID, SAI and KIMStart here because every later topic refers to these documents. Learn what each one contains and who must receive it.
  2. 2Offer Document Contents and Fund Fact SheetOnce you know the documents, learn what goes inside the offer document and how the fact sheet reports a running scheme.
  3. 3New Fund Offer (NFO) Process and AllotmentThe NFO is the first stage of a scheme's life, and the SID is the document investors use at that stage.
  4. 4Scheme Categorisation and RationalisationCategories decide what a scheme may invest in and how it is named. Study this after the basics so you can read an offer document against it.
  5. 5Fundamental Attributes and Changes to SchemesYou need to know what a scheme is first before you learn which changes are fundamental and what protection investors get.
  6. 6Scheme Mergers, Closure and Unitholder RightsStudy this last because mergers and closure are mostly fundamental changes. Unitholder rights tie the whole chapter together.

How to prepare Scheme Related Information

Treat this chapter as a set of matching tasks: document to content, category to rule, event to investor right. Active recall works better than re-reading.

  1. Read the six topics in the study order above and make a one-page table of SID, SAI and KIM: what each contains, who needs it, and how it is updated.
  2. Learn the NFO sequence from offer to allotment as a timeline. Note the exact periods the workbook gives and write them on a card.
  3. Memorise the five SEBI scheme groups: Equity, Debt, Hybrid, Solution Oriented and Other. Then learn the main category rules, such as the large cap definition and the minimum equity holding.
  4. List what counts as a fundamental attribute. Then list what the investor gets when one changes: notice, and an exit option at NAV without exit load.
  5. Link mergers, winding up and unitholder rights to the same protections, so you learn one idea and not three.
  6. Practise MCQs after each topic. For every wrong answer, write down the trap word that fooled you.
  7. Revise the quick points below on the last day, and check every number against your current NISM workbook.

Common mistakes in Scheme Related Information

  • Mixing up SID, SAI and KIM contents

    Fix: Remember the scope: SID is about one scheme, SAI is about the fund house, and KIM is the short summary that travels with the form.

  • Treating all scheme changes as needing an exit option

    Fix: The exit option attaches to fundamental attribute changes and similar events. Learn the list of fundamental attributes first, then match each change to it.

  • Misremembering category rules

    Fix: Learn the large, mid and small cap definitions first, then the minimum equity holding of each category, using a flashcard per category.

  • Confusing the NFO period with the allotment and refund period

    Fix: Draw a timeline: NFO opens, NFO closes, units allotted, refunds paid. Attach each limit to its own stage.

  • Treating the fact sheet as a legal offer document

    Fix: The offer document sets the terms of the scheme. The fact sheet only reports how a running scheme is doing.

  • Relying on old figures

    Fix: Check every number against the latest NISM workbook for V-A before the exam.

Last-day revision: Scheme Related Information

  • SID holds the full scheme details; SAI holds details about the mutual fund as a whole; KIM is a short summary given with the application form.
  • SEBI groups schemes into five groups: Equity, Debt, Hybrid, Solution Oriented and Other.
  • Each of the Equity, Debt and Hybrid groups has several categories. Solution Oriented has 2 (Retirement and Children's) and Other has 2 (Index/ETF and Fund of Funds). Confirm the exact count for each group in your current NISM workbook.
  • An AMC can generally offer only one scheme per category, with exceptions such as index funds, fund of funds and sectoral or thematic schemes.
  • The classification is based on the AMFI list of companies ranked by average market capitalisation over six months: the top 100 are large cap, the 101st to 250th are mid cap, and the 251st onwards are small cap.
  • A large cap fund must invest at least 80% of assets in large cap stocks.
  • ELSS must invest at least 80% in equity and equity-related instruments, with a 3-year lock-in under tax law.
  • Fundamental attribute changes need written notice to unitholders and an exit option at prevailing NAV with no exit load.
  • The exit option must be available to unitholders for at least 30 days. Notice is given by a written communication to each unitholder and by newspaper advertisement.
  • Mergers and consolidations that modify fundamental attributes or adversely affect unitholders' interest require notice and an exit option at NAV without exit load.
  • The fact sheet is a periodic summary of portfolio, performance and expenses, not a legal offer document.
  • V-A has 100 questions, 2 hours, 50% pass mark and no negative marking.

Scheme Related Information practice questions

Scheme Related Information: frequently asked questions

What is the difference between SID, SAI and KIM?

The SID gives full details of a specific scheme, such as its objective, strategy and risks. The SAI gives statutory information about the mutual fund, such as its sponsor, trustees and AMC. The KIM is a short summary of the key scheme information that is given with the application form.

Is there negative marking in NISM-Series-V-A?

No. The V-A exam has 100 questions, 100 marks and a 2-hour duration, with a 50% pass mark and no negative marking. You should attempt every question.

How much of the V-A exam comes from Scheme Related Information?

Do not rely on any marks figure from unofficial sources. Check the syllabus and the chapter list in the current NISM workbook. Prepare this chapter thoroughly because its questions are direct and factual.

What rights do unitholders get when a scheme changes?

When a fundamental attribute changes, unitholders must be told by a written communication to each unitholder and by newspaper advertisement. They also get an exit option at the prevailing NAV without paying an exit load. This option must be open for at least 30 days. Check the exact wording in your current NISM workbook.