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

Which of the following is an acceptable way for a mutual fund distributor to handle an investor's KYC and transaction documents?

The distributor should assist with KYC and place transactions only on the investor's explicit instruction, without holding the investor's credentials or changing contact details. Retaining cheque books, misusing logins or substituting the distributor's mobile number breaches the code of conduct and risks misuse.

  1. AKeep the investor's original cheque books to process future investments
  2. BUse the investor's login credentials to place orders without consent
  3. CHelp the investor complete KYC and submit transactions only on the investor's explicit instruction, without retaining the investor's confidential credentialsCorrect
  4. DChange the investor's registered mobile number to the distributor's number

Explanation

A distributor must act on the investor's instructions and protect confidential information. Holding cheque books, using the investor's credentials without consent, or replacing contact details with the distributor's are improper practices that enable misuse.

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