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

Which of the following best describes the role of a mutual fund distributor holding a valid AMFI Registration Number (ARN)?

A mutual fund distributor with an ARN is an intermediary between investors and the AMC. The distributor sells scheme units and earns commission from the AMC, while portfolio management, custody and NAV functions belong to other entities.

  1. AA person who acts as an intermediary between the investor and the AMC for selling mutual fund units and earning commissionCorrect
  2. BA person who manages the investment portfolio of a scheme on behalf of the trustees
  3. CA person who safeguards the securities of the scheme as custodian
  4. DA person who audits the NAV computed by the AMC

Explanation

A distributor is a sales intermediary who markets mutual fund schemes to investors and is compensated by the AMC through commission. Portfolio management is done by the AMC's fund managers, custody by the custodian, and NAV audit is not a distributor function.

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