NISM Certifications · NISM-Series-V-A: Mutual Fund Distributors · Fund Distribution and Channel Management Practices
What is the main purpose of the Know Your Distributor (KYD) process?
KYD is meant to verify the identity and key details of the distributor and maintain them with a central record that AMCs can use. It does not determine commission slabs, approve scheme selection, or assess an investor's risk profile.
- ATo verify the identity and details of the distributor and keep a record with a central registryCorrect
- BTo fix the commission slab of the distributor
- CTo approve the distributor's choice of schemes
- DTo certify the investor's risk profile
Explanation
KYD captures and verifies a distributor's identity and details and holds them with a registry so AMCs can rely on it. It does not set commissions, approve scheme choices or profile investors, which relate to other processes.
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