Skip to content

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

Which of the following is a required practice for a mutual fund distributor under the AMFI Code of Conduct?

Distributors must disclose commissions received across schemes and recommend products on suitability rather than higher commission. Guaranteeing returns, encouraging frequent switching for commission and misusing investor money are prohibited under the AMFI Code of Conduct.

  1. ADisclosing to the investor all the commissions received from different schemes, where applicable, and not recommending schemes solely on the basis of higher commissionCorrect
  2. BGuaranteeing minimum returns on schemes to attract new investors
  3. CAdvising investors to switch schemes frequently to earn additional commission
  4. DUsing investor funds temporarily for the distributor's own business before remitting to the AMC

Explanation

The AMFI Code of Conduct requires fair dealing, suitability and disclosure of commissions. Guaranteeing returns, churning and misusing client money are prohibited practices.

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