📊 NISM Series V-A Chapter 9 of 12 ⚖ 15 marks weightage

Ch.9: Investor Services

Q: What is the maximum period an NFO of a scheme other than ELSS can stay open for subscription?

15 days. SEBI requires an NFO to stay open for at least 3 working days. Schemes other than ELSS can stay open for at most 15 days.

Q: Within how many business days of an NFO closing must units be allotted or money refunded?

5 business days. Allotment or refund must be completed within 5 business days of the NFO closing. An open-ended scheme must then re-open for sale and repurchase within 5 business days of allotment.

Q: An NFO refund is made after the 5-business-day deadline. What interest is payable to the investor, and who bears it?

15% a year for the delay, borne by the AMC. Late refunds carry interest at 15% a year for the period of delay. This cost falls on the AMC and cannot be charged to the scheme.

Q: An AMC already runs a large cap fund. In which of these categories can it still launch a second scheme?

An index fund. Normally an AMC can have only one scheme per category. Index funds, fund of funds and sector or thematic funds are exceptions where multiple schemes are allowed.

Q: An investor applies without a distributor. What must they write in the ARN box of the application form?

Direct. Writing 'Direct' in the ARN space places the investment in the direct plan. If a distributor's ARN is given, the investment goes into the regular plan.

Q: What is the NAV called after an IDCW (dividend) has been paid out?

Ex-dividend NAV. The NAV falls by the amount distributed. Before payment it is the cum-dividend NAV, and after payment it is the ex-dividend NAV.

Q: An investor holds 100 units in the IDCW reinvestment option. The NAV is ₹12 and a dividend of ₹1 per unit is declared. How many extra units does the investor get?

9.09 units. The ₹100 dividend is reinvested at the ex-dividend NAV of ₹11 (₹12 − ₹1). ₹100 ÷ ₹11 = 9.09 units.

Q: In which option does the number of units held go up when a dividend is declared?

IDCW reinvestment option. Under reinvestment the dividend buys more units at the ex-dividend NAV. In payout the cash goes to the bank, and in growth no dividend is declared at all.

Practice questions for NISM-Series-VA: Mutual Fund Distributors Certification Examination (mandated by AMFI/SEBI for mutual fund distribution). Chapter 9 carries 15 out of 100 marks in the final examination. The exam has 100 MCQs, 120-minute duration, 50% passing score, and no negative marking.

MCQ

Total Qs

Exam Marks

50%

Pass Score

None

Neg. Marking

What You Will Learn in This Chapter

Understand the NFO process and investor onboarding
Learn systematic transaction facilities: SIP, SWP and STP
Understand KYC requirements and account statements

Key Terms:NFOKYCSIPSWPSTPaccount statementfolionominationcut-off timing

Concept guide: NAV cut-off time rules (1:30 pm vs 3 pm), with examples →

Chapter 9 in 10 minutes: investor services

Chapter 9 is one of the longest chapters in NISM V-A and is full of numbers. Exam questions come mainly from timelines, limits, cut-off times and who can do what in a folio. Learn the tables below first, then practise the questions.

1. NFO and allotment timelines

Event	Rule
NFO open period	At least 3 working days; at most 15 days (ELSS excepted)
Allotment or refund	Within 5 business days of NFO close; late refunds carry 15% a year interest, paid by the AMC
Re-opening of an open-ended scheme	Within 5 business days of allotment
Statement of account / demat credit	Statement within 5 working days; units in demat within 2 working days of request
NFO price	Face value, normally ₹10 (no entry load)
SIF minimum	₹10 lakh across all strategies, at PAN level

An AMC may run only one scheme per category, except index funds, fund of funds and sector or thematic funds.

2. Plans and options

Direct vs regular: same portfolio, different TER, so different NAVs. Write "Direct" in the ARN box to invest direct.
IDCW payout: cash to the bank, units unchanged, NAV falls by the payout (ex-dividend NAV).
IDCW reinvestment: the payout buys more units at the ex-dividend NAV. Example: 100 units, ₹1 dividend, NAV ₹12 → ₹100 ÷ ₹11 = 9.09 new units.
Growth: no dividend, NAV keeps all gains.
Bonus 1:3: one free unit for every three held; NAV falls in proportion, value unchanged.

3. Cut-off times and applicable NAV

Scheme and transaction	Cut-off	NAV
Equity and debt (not liquid/overnight), purchase	3:00 pm	Day the money is available for use before cut-off, any amount
Liquid and overnight, purchase	1:30 pm	NAV of the day before the day money is available
Equity and debt, redemption	3:00 pm	Same day if before cut-off, else next business day
Liquid, redemption	3:00 pm	NAV of the day before the next business day
Overnight, online redemption	7:00 pm	Extended cut-off from 2025

Time is stamped at the Official Point of Acceptance, not when a distributor collects the form. For online deals, the web server's time counts. Cut-offs do not apply to NFOs or international schemes.

4. Payments: the ₹50,000 numbers

Cash and e-wallet together: ₹50,000 per investor, per mutual fund, per financial year.
Third-party payment by parents for a minor: up to ₹50,000 per purchase or SIP instalment.
Micro-SIP / PAN-exempt investments: up to ₹50,000 a year; quote a PEKRN.
Instant Access Facility: lower of ₹50,000 or 90% of value, per day per scheme.
Demand drafts bought with cash for ₹50,000 or more are not accepted.

Credit cards, stock-invests, postal and money orders, outstation and post-dated cheques (except SIPs) are not accepted. A cheque older than 3 months is stale. ASBA keeps NFO money in your account until allotment.

5. Folio, KYC and bank rules

Up to 3 holders; benefits go to the first holder. Joint holders cannot be added or removed, except deletion on death.
Minor: guardian does KYC, no joint holders, proof of age needed. On majority the folio is frozen until the minor-to-major (MAM) change; SIPs stop at the date of majority.
PoA holder: both sides KYC; can do everything except nominate.
Bank accounts: up to 5 for individuals and 10 for non-individuals, with one default.
UBO: more than 25% for companies, more than 15% for partnerships. FATCA status changes are reported within 30 days.

6. Nomination and transmission

Up to 10 nominees; unequal shares must total 100%, otherwise split equally.
Nominees can be individuals (including minors and NRIs) or governments; not companies, societies, a Karta or a PoA holder.
Joint holder survives first; the nominee comes next; with neither, legal heirs.
The nominee holds units in trust for the legal heirs.

7. Other must-knows

The monthly CAS goes to investors with a transaction that month, matched by PAN. The portfolio statement is due within 10 days of each half-year end, and the annual report within four months. MITRA, hosted by CAMS and KFintech, traces unclaimed folios. A voluntary debit freeze on folios is offered through MF Central.

Summary written by BullWiser from the NISM Series V-A workbook (March 2026 edition), Chapter 9. Always refer to the current NISM workbook before your exam.

Multiple Choice Questions (51)

Q1 MCQ EasyNFO process

What is the maximum period an NFO of a scheme other than ELSS can stay open for subscription?

A15 days

B30 days

C3 working days

D45 days

Q2 MCQ MediumNFO process

Within how many business days of an NFO closing must units be allotted or money refunded?

A15 business days

B5 business days

C2 business days

D10 business days

Q3 MCQ MediumNFO process

An NFO refund is made after the 5-business-day deadline. What interest is payable to the investor, and who bears it?

A8% a year, charged to the scheme

BNo interest is payable on refunds

C15% a year for the delay, borne by the AMC

D12% a year, shared by AMC and trustees

Q4 MCQ MediumNFO process

An AMC already runs a large cap fund. In which of these categories can it still launch a second scheme?

AA mid cap fund it already runs

BA liquid fund it already runs

CA large cap fund

DAn index fund

Q5 MCQ EasyNFO process

Why does a close-ended scheme have no scheme re-opening date?

AIt re-opens only for NRIs

BIt does not sell or buy back units after the NFO; investors trade on the stock exchange

CIt re-opens only on the maturity date

DIt re-opens only after SEBI approval

Q6 MCQ EasyPlans

An investor applies without a distributor. What must they write in the ARN box of the application form?

ATheir own PAN

BNIL

CSelf

DDirect

Q7 MCQ MediumPlans

Why do the direct plan and regular plan of the same scheme have different NAVs?

AThey have different expense ratios, because the direct plan pays no distribution commission

BThe direct plan is valued weekly

CThey hold different portfolios

DThe regular plan includes an entry load

Q8 MCQ EasyOptions

What is the NAV called after an IDCW (dividend) has been paid out?

AFace value NAV

BAdjusted sale price

CEx-dividend NAV

DCum-dividend NAV

Q9 MCQ HardOptions

An investor holds 100 units in the IDCW reinvestment option. The NAV is ₹12 and a dividend of ₹1 per unit is declared. How many extra units does the investor get?

A12 units

B10 units

C8.33 units

D9.09 units

Q10 MCQ MediumOptions

In which option does the number of units held go up when a dividend is declared?

AGrowth option

BEvery option equally

CIDCW reinvestment option

DIDCW payout option

Q11 MCQ MediumOptions

Why is the growth option's NAV usually higher than the IDCW option's NAV of the same scheme?

AThe growth option has a lower expense ratio

BNo dividend is paid, so the NAV keeps the full portfolio gain

CSEBI adds a bonus to growth NAVs

DThe growth option holds riskier stocks

Q12 MCQ EasyAllotment

At what price are units usually sold during an NFO?

AFace value, normally ₹10

B₹100

CThe previous day's NAV

DA price set by bidding

Q13 MCQ MediumAllotment

A scheme announces a 1:3 bonus. An investor holds 300 units. What happens?

AThey get 900 free units and the NAV is unchanged

BThey must pay NAV for 100 new units

CThey get 100 free units and the NAV falls proportionately

DTheir units are reduced to 100

Q14 MCQ HardSIF

What is the minimum investment threshold for investment strategies under a Specialised Investment Fund (SIF)?

A₹50 lakh per scheme

B₹1 lakh per strategy

C₹1 crore across all mutual funds

D₹10 lakh, counted at PAN level across all SIF strategies

Q15 MCQ MediumAccount statements

When is a Consolidated Account Statement (CAS) for a calendar month sent to an investor?

AOnly once a year in April

BWhen there was a transaction in any of their folios that month

CEvery month, regardless of transactions

DOnly when the investor asks for one

Q16 MCQ MediumAccount statements

How is a common investor identified across different mutual funds for the CAS?

ABy PAN

BBy ARN

CBy folio number

DBy mobile number

Q17 MCQ EasyEligible investors

What is the maximum number of holders a mutual fund folio can have?

AFour

BTwo

CThree

DFive

Q18 MCQ MediumEligible investors

Which statement about investments in a minor's name is correct?

AA minor's folio can have up to three holders

BThe guardian must be KYC compliant and the folio cannot have joint holders

CThe minor must complete KYC personally

DPayment can come from any relative's account without limits

Q19 MCQ HardEligible investors

Which statement about a Power of Attorney (PoA) holder operating a folio is correct?

AThey can do all transactions except making or changing a nomination

BThey need not complete KYC

CThey can add new joint holders

DThey replace the investor, who can no longer transact

Q20 MCQ MediumApplication form

Once a folio is opened in joint names, what change to the holders is allowed?

AAny holder can be removed with a written request

BThe first and second holders can swap at will

CA new joint holder can be added at any time

DA name can be deleted only on a holder's death

Q21 MCQ MediumApplication form

When must FATCA/CRS details be given in the application form?

AOnly for HUF investors

BWhen the investor's birth, citizenship or tax residency is outside India

CFor every investment above ₹5 lakh

DOnly for ELSS investments

Q22 MCQ EasyPayments

Which of these payment modes is NOT allowed for buying mutual fund units?

AUPI

BNet banking

CCredit card

DDebit card

Q23 MCQ MediumPayments

What is the umbrella limit for mutual fund subscriptions made through cash and e-wallets?

A₹50,000 per investor per mutual fund per financial year

B₹10,000 per transaction

C₹2 lakh per investor per year

D₹1 lakh per scheme per month

Q24 MCQ MediumPayments

What is the main benefit of ASBA when applying in an NFO?

AThe investor gets a guaranteed allotment price below ₹10

BThe application can be made with cash

CThe investor gets bonus units

DThe money stays in the investor's account, earning interest, until allotment

Q25 MCQ HardThird-party payments

Parents pay for a minor's SIP from their own account. Up to what amount per instalment is this accepted as a permitted third-party payment?

A₹1 lakh

B₹2 lakh

C₹10,000

D₹50,000

Q26 MCQ MediumThird-party payments

Which of these is a permitted third-party payment?

AA distributor paying from their account for a client

BA friend paying from their own account for an adult

CAn employer investing for employees through payroll deduction

DA company paying for its director's personal folio

Q27 MCQ EasyPayments

A cheque dated more than 3 months before it is presented is called what, and is it accepted?

AStale; it is not accepted

BPost-dated; it is accepted

COutstation; it is always accepted

DCrossed; it is accepted

Q28 MCQ MediumRepurchase

How many bank accounts can an individual investor register with a mutual fund?

AUp to 3

BUp to 5

COnly 1

DUp to 10

Q29 MCQ HardRepurchase

An investor's redemption asks for credit to a bank account that is not registered with the mutual fund. What happens?

AThe AMC holds the money until the account is registered

BThe redemption is rejected

CThe money goes to the unregistered account

DThe money goes to the default registered account and the bank change is not processed

Q30 MCQ HardInstant access

What is the Instant Access Facility (IAF) limit for same-day redemption credit?

A₹50,000 or 90% of the investment value, whichever is lower, per day per scheme

B₹2 lakh or 100% of the value, whichever is higher

C₹1 lakh per month per AMC

D₹25,000 per transaction with no daily cap

Q31 MCQ EasyCut-off times

What is the cut-off time for purchases in a liquid fund?

A7:00 pm

B3:00 pm

C1:30 pm

D12:00 noon

Q32 MCQ MediumCut-off times

For a purchase in an equity fund, which NAV applies?

AAlways the next day's NAV, whatever the amount

BThe NAV of the business day the money is available for use before the cut-off

CThe NAV of the day the form is signed

DThe NAV of the day the cheque is handed to the distributor

Q33 MCQ HardCut-off times

Monday and Wednesday are business days and Tuesday is a holiday. An equity redemption is submitted on Monday after the cut-off. Which NAV applies?

ATuesday's NAV

BWednesday's NAV

CMonday's NAV

DThursday's NAV

Q34 MCQ MediumCut-off times

Up to what time can overnight fund redemptions be placed online and still get the cut-off benefit?

A7:00 pm

B1:30 pm

CMidnight

D3:00 pm

Q35 MCQ MediumTime stamping

An investor gives a redemption form to a distributor at 2:30 pm, and the distributor submits it at the official point of acceptance at 4:00 pm. Which time decides the NAV?

AThe time the RTA processed it

BThe time printed on the form

C4:00 pm, when it reached the official point of acceptance

D2:30 pm, when the investor handed it over

Q36 MCQ EasyKYC

Which investors must be KYC compliant?

AOnly first holders

BOnly NRIs

COnly investors putting in more than ₹50,000

DAll investors, including joint holders, guardians and PoA holders, whatever the amount

Q37 MCQ MediumKYC

What document must a PAN-exempt investor making Micro-SIPs quote in place of a PAN?

ACKYC number of the distributor

BPAN Exempt KYC Reference Number (PEKRN)

CARN

DAadhaar Virtual ID

Q38 MCQ HardKYC

For a company investing in a mutual fund, who is an Ultimate Beneficial Owner (UBO)?

AAnyone owning more than 5% of its shares

BOnly shareholders who are also directors

COnly the managing director

DAnyone owning or entitled to more than 25% of its shares or profits

Q39 MCQ MediumKYC

What benefit does KYC through a KYC Registration Agency (KRA) give the investor?

AKYC done once with one intermediary is valid across the capital market

BIt allows unlimited cash investments

CIt guarantees faster redemptions

DIt exempts the investor from PAN

Q40 MCQ MediumSystematic plans

An investor redeems ₹1,000 through an SWP when the NAV is ₹10 and the exit load is 1%. About how many units are redeemed?

A100 units

B99 units

C101.01 units

D110 units

Q41 MCQ MediumSystematic plans

A monthly SIP of ₹2,500 has a 10% annual top-up. What is the monthly instalment in year 3?

A₹3,500

B₹2,750

C₹3,025

D₹3,000

Q42 MCQ MediumSystematic plans

How is an STP treated for loads and taxes?

ALoads apply only on the first instalment

BEach transfer is a redemption from the source scheme, so exit load and tax apply

COnly the target scheme charges an exit load

DIt is tax-free because the money stays in the same fund house

Q43 MCQ MediumSystematic plans

A minor's SIP is set up for 10 years, but the minor turns 18 in year 4. Until when is the SIP registered?

AUntil the date the minor attains majority

BFor the full 10 years

CUntil the guardian cancels it

DUntil the minor turns 21

Q44 MCQ EasyNomination

Up to how many nominees can an investor name in a mutual fund folio?

BUnlimited

D10

Q45 MCQ MediumNomination

Which of these CANNOT be appointed as a nominee in a mutual fund folio?

AA private company

BAn NRI relative

CA minor child

DA state government

Q46 MCQ HardTransmission

A folio is held jointly by A and B with C as nominee. A dies. Who gets the units?

AA's legal heirs, by succession certificate

BC, the nominee

CB, the surviving joint holder

DB and C equally

Q47 MCQ MediumNomination

What legal right does a nominee get on the investor's death?

AA right only to the dividends

BFull ownership, overriding the will

CNo right to receive the units at all

DThey receive the units as a trustee for the legal heirs

Q48 MCQ EasyPledge

Once units are pledged to a lender, what can the unitholder NOT do without the lender's written no-objection?

AView the NAV online

BSell or switch out the pledged units

CChange their email address

DReceive account statements

Q49 MCQ EasyDemat

What is converting demat mutual fund units back into physical (statement) form called?

ADematerialisation

BRe-materialisation

CTransmission

DConsolidation

Q50 MCQ MediumTurnaround times

Within what time must a half-yearly portfolio statement be sent to unitholders?

AWithin 30 days of the half-year end

BWithin 3 months of the year end

CWithin 4 months of the year end

DWithin 10 days of the half-year end (31 March and 30 September)

Q51 MCQ MediumUnclaimed assets

What is MITRA?

AA platform to trace inactive and unclaimed mutual fund folios

BA mutual fund transaction platform run by AMFI

CA new KYC registration agency

DA SEBI grievance portal

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About this content: These practice questions are based on the NISM-Series-VA: Mutual Fund Distributors Certification Examination Workbook published by the National Institute of Securities Markets (NISM), Mumbai. NISM is a SEBI-established institution. Questions cover Investor Services with verified answers and explanations. BullWiser is an independent exam preparation platform — not affiliated with NISM, SEBI or AMFI. Last updated: July 9, 2026.

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