Skip to content

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

Under the AMFI Code of Conduct and SEBI guidelines, which action by a distributor is a violation?

Recommending a scheme mainly because it pays higher commission, without checking suitability for the client, is a violation. Distributors must act in the investor's interest, disclose commissions, share documents and clearly state market risk.

  1. ARecommending a scheme mainly because it pays a higher commission, without assessing suitability to the clientCorrect
  2. BDisclosing all commissions received from AMCs on request to the investor
  3. CProviding the investor with the scheme's offer documents on request
  4. DInforming the investor that mutual fund investments are subject to market risk

Explanation

Distributors must put the investor's interest first and recommend suitable products. Choosing a scheme for higher commission without suitability assessment is mis-selling. The other actions are expected good practice.

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