Skip to content

NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Fund Distribution and Channel Management Practices

A distributor wants to advertise a scheme's past performance to prospective investors. Which practice is consistent with SEBI and AMFI guidelines?

Performance may be presented only along with the standard disclaimer that past performance may or may not be sustained in the future. Guaranteeing returns, showing only the best period, or omitting the benchmark would be misleading and breach SEBI and AMFI advertisement guidelines.

  1. AGuaranteeing that past returns will be repeated
  2. BShowing only the best performing period of the scheme
  3. CPresenting performance with the standard risk disclaimer that past performance may or may not be sustainedCorrect
  4. DQuoting returns without naming the scheme benchmark

Explanation

Advertisements must be fair and not misleading, and must carry the disclaimer that past performance may or may not be sustained in future. Guaranteeing returns or cherry-picking periods is misleading and breaches the code.

Did you get it right without looking?

One question tells you little. A timed set on Fund Distribution and Channel Management Practices shows your real accuracy, how long you take and where you lose marks.

Practise Fund Distribution and Channel Management PracticesFree diagnostic mock

More Fund Distribution and Channel Management Practices questions