Which regulator oversees mutual funds, depositories, custodians and RTAs?
SEBI (Securities and Exchange Board of India)
Which regulator oversees banking and money markets?
RBI (Reserve Bank of India)
Which regulator oversees the insurance market?
IRDAI
Which regulator oversees the pension market?
PFRDA
Is AMFI a regulator or a Self-Regulatory Organisation (SRO)?
Neither. AMFI is an industry association — it sets ethical standards, issues the ARN, and disciplines Code of Conduct breaches, but has no regulatory power.
What does a KRA do?
A KYC Registration Agency processes and centrally stores investor KYC data so it can be reused across any SEBI-registered intermediary, without repeating the process.
Who operates India's Central KYC Records Registry (cKYCR)?
CERSAI
Who sets up a mutual fund trust, and what are they required to have?
The Sponsor — needs ≥ 5 years in financial services, positive net worth every year for the preceding 5 years, and average net annual profit ≥ Rs. 10 crore.
What fraction of the Board of Trustees must be independent?
At least two-thirds (2/3)
What fraction of the AMC's Board of Directors must be independent?
At least 50%
What is the AMC's minimum net worth requirement (effective Jan 1, 2024)?
Rs. 50 crore, maintained continuously
Who holds a scheme's securities and settles its transactions?
The Custodian, appointed by the Trustees
Is it compulsory for an AMC to appoint an external RTA?
No — an AMC may handle registrar and transfer functions in-house instead.
What percentage of unit-holders can terminate an AMC's appointment?
75% of unit-holders (or a majority of trustees)
Core definitions (32 cards)
What is NAV?
Net Asset Value — the true worth of one unit of a scheme; Net Assets ÷ Outstanding Units.
What is AUM?
Assets Under Management — the total size of a scheme, equal to NAV × total outstanding units.
What is Unit Capital?
Number of units issued multiplied by the face value (typically Rs. 10).
What does 'Mark to Market' mean?
Valuing every security in the portfolio at its current market value, done daily to compute an accurate NAV.
What does TER stand for and what does it capture?
Total Expense Ratio — all permitted costs charged to a scheme: base expense ratio + brokerage cost + transaction cost + statutory levies, as a % of daily net assets.
Is an entry load currently permitted?
No — entry loads are banned; the sale price always equals the NAV.
Who benefits when an exit load is charged — the AMC or the scheme?
The scheme. Exit loads are credited back into the scheme, not retained by the AMC.
What are the three IDCW-related options an investor can choose?
Growth (nothing paid out), IDCW Pay-out (dividend paid in cash), and IDCW Reinvestment (dividend reinvested as new units at the ex-dividend NAV).
What is the difference between cum-dividend and ex-dividend NAV?
Cum-dividend NAV is the NAV just before a payout; ex-dividend NAV is the (lower) NAV right after the dividend has been paid.
What is a scheme's 'folio'?
An investor's account record with a mutual fund, identified by a folio number, tracking all their holdings in that fund.
How many risk levels does the standard Riskometer show?
Six: Low, Low to Moderate, Moderate, Moderately High, High, Very High
What replaces the Riskometer for Specialized Investment Fund (SIF) strategies?
A five-level 'Risk-Band'
What is a segregated portfolio (side-pocketing) for?
To isolate a defaulted or downgraded debt/money-market instrument from the rest of a scheme's portfolio, protecting the remaining investors.
What is 'gating'?
SEBI-permitted restriction on redemptions during a systemic, market-wide liquidity crisis — never for a single security's own illiquidity.
What does the SID (Scheme Information Document) cover?
Everything specific to one scheme — objective, asset allocation, risks, loads, fees.
What does the SAI (Statement of Additional Information) cover?
Statutory information about the AMC/mutual fund as a whole — one SAI applies across all of that fund's schemes.
What is the KIM, and when must it be used?
Key Information Memorandum — a summary of the SID and SAI, mandatorily attached to every application form.
Is the monthly fund factsheet a mandatory document?
No — it's an AMFI best practice that most AMCs follow voluntarily, not a regulatory requirement.
What is IPV, and how often must it be done?
In-Person Verification — a mandatory KYC step, done once; it doesn't need repeating with a different intermediary.
What is a PEKRN?
PAN Exempt KYC Reference Number — issued to small investors who are exempt from providing a PAN card (within prescribed limits).
What does FATCA/CRS disclosure apply to?
Investors whose citizenship, birthplace, or tax residency is outside India.
What is a UBO?
Ultimate Beneficial Owner — for non-individual investors, anyone owning/entitled to more than a threshold share of the entity's capital or profits.
What is an ARN, and who needs one?
AMFI Registration Number — mandatory for anyone distributing mutual funds, obtained after passing NISM-Series-V-A and completing KYD.
What is an EUIN, and how does it differ from an ARN?
Employee Unique Identification Number — identifies an individual employee of an institutional distributor; the employee operates under the institution's own ARN, not a separate one.
How is trail commission structured differently from the old upfront commission model?
Trail commission is paid periodically as a percentage of the current (daily) value of the investor's holding, for as long as the money stays invested — there is no one-time upfront payment.
What is a SIP Top-up facility?
A facility to automatically increase the SIP instalment amount over time, by a fixed rupee amount or a percentage.
How does an STP differ from a Switch?
An STP is multiple scheduled tranches moving money from a source scheme to a target scheme; a Switch is a single one-time transaction doing the same thing.
What is a 'trigger' in the context of systematic transactions?
A one-time, pre-set instruction to redeem or switch units automatically once a defined NAV, index level, or date is reached.
What does 'MF Lite' refer to?
SEBI's lighter regulatory framework for AMCs running only passively managed schemes (index funds, ETFs, specified fund-of-funds).
What is 'Product Labelling'?
The Riskometer shown together with a short 'this product is suitable for investors who are seeking...' statement, so an investor can judge suitability at a glance.
What document must a company submit to invest in a mutual fund?
A specific Board Resolution authorising that particular investment and naming the signatories — not a general shareholders' resolution.
Can a first-time investor start with a SIP, without an existing folio?
Yes — a SIP can be used to make a fresh purchase; the first instalment itself creates the folio.
Formulas & ratios (16 cards)
Formula for NAV?
Net Assets (Unit-holders' Funds) ÷ Number of Outstanding Units
Formula for Simple Return?
(Later Value − Initial Value) ÷ Initial Value — used only when no dividend was paid in the period.
Formula for Compounded Return / CAGR?
(Later Value ÷ Initial Value) ^ (1÷n) − 1, where n = number of years
How does SEBI's prescribed CAGR method treat a dividend paid during the period?
It assumes the dividend was reinvested in the same scheme at the ex-dividend NAV.
Formula for Sharpe Ratio?
(Scheme Return − Risk-free Return) ÷ Standard Deviation
Formula for Treynor Ratio?
(Scheme Return − Risk-free Return) ÷ Beta
Worked example: return 10%, risk-free 7.5%, Beta 0.5 — what's the Treynor Ratio?
(10% − 7.5%) ÷ 0.5 = 2.5% ÷ 0.5 = 5%
What does Alpha measure?
The scheme's actual return minus its CAPM-predicted ('optimal') return, given its Beta. Positive = manager out-performance.
Formula for the Information Ratio?
(Portfolio Return − Benchmark Return) ÷ Standard Deviation of Excess Return — the only ratio AMCs must disclose daily.
What does Tracking Error measure?
The standard deviation of a scheme's excess returns over its benchmark — how consistently it out/under-performs, not by how much.
How do you annualize a standard deviation calculated from monthly returns?
Multiply by √12 (weekly data: √52, daily data: √252)
Is Beta relevant for debt schemes?
No — Beta measures market/systematic risk and is relevant only for equity schemes.
Formula for Portfolio Turnover Ratio?
Lower of (Purchases, Sales) during a period ÷ Average Net Assets
A scheme's Portfolio Turnover Ratio is 2 (200%). What's the implied average holding period?
6 months (12 months ÷ 2)
Formula for daily trail commission?
AUM × annual commission rate ÷ 365
What does Modified Duration measure?
A debt security's price-sensitivity to interest rate changes — higher duration means higher interest-rate risk.
Key numbers (42 cards)
Investor grievance redressal timeline?
21 calendar days maximum
Maximum nominees allowed per folio?
10
Exit window when a scheme's fundamental attributes change?
At least 30 days, at prevailing NAV, no exit load
SID update frequency?
Within 1 month of each half-year close (Sept/March)
SAI update frequency?
Within 3 months of the financial year close
NAV decimal places for equity/balanced schemes?
At least 2
NAV decimal places for index/liquid/debt schemes?
4
TER cap for an equity scheme on the first Rs. 500 crore?
2.10% (1.85% for non-equity-oriented)
Additional brokerage/transaction cost allowed for cash-market trades?
0.06% of trade value
Additional brokerage/transaction cost allowed for derivatives trades?
0.02% of trade value
Minimum age to obtain an ARN?
18 years
Minimum share of an AMC's net worth the Sponsor must hold?
40% — holding this much (or more) deems a person the sponsor
The four independent triggers for SEBI's distributor due diligence process (any ONE is enough)?
>20 locations — OR — >Rs. 100cr non-institutional AUM — OR — >Rs. 50 lakh commission from one AMC — OR — >Rs. 1cr commission industry-wide
Cap on additional commission for onboarding a new B-30 city or women investor?
1% of first-year investment, capped at Rs. 2,000
Equity-oriented fund LTCG tax rate and annual exemption?
12.5%, with the first Rs. 1.25 lakh of gains per year exempt (holding period > 12 months)
Equity-oriented fund STCG tax rate?
20% (holding period ≤ 12 months)
How are debt fund STCG and LTCG taxed?
Both at the investor's Marginal Slab Rate, regardless of holding period
STT rate on delivery-based sale of equity fund units?
0.001%, payable by the seller (nil on purchase; not applicable to debt funds)
Section 80C / ELSS deduction limit?
Rs. 1.5 lakh, combined across all 80C avenues (old tax regime only)
ELSS lock-in period?
3 years from the date of each investment
TDS rate on a resident investor's IDCW, and the threshold?
10%, if the dividend from a fund exceeds Rs. 5,000 in a year
Stamp duty on issue of mutual fund units?
0.005% of the amount invested
Stamp duty on transfer of mutual fund units?
0.015%
How many years can an unabsorbed long-term capital loss be carried forward?
8 years
Bonus stripping disallowance window (around the record date)?
3 months before, and 9 months after, the bonus record date
Minimum and maximum NFO subscription period (non-ELSS)?
Minimum 3 working days, maximum 15 days
Timeline for NFO allotment or refund after closure?
Within 5 business days
Interest rate payable on a delayed NFO refund?
15% p.a., charged to the AMC (not the scheme)
Maximum joint holders allowed on one folio?
3
PAN-exempt investment ceiling (Micro-SIP + lump sum combined)?
Rs. 50,000 per investor, per mutual fund, per year
Cash investment ceiling for eligible small investors?
Rs. 50,000 per investor, per mutual fund, per year
Instant Access Facility (IAF) cap, and which schemes offer it?
Lower of Rs. 50,000 or 90% of investment value; liquid schemes only, same-day credit
Cut-off time for equity/debt (non-liquid) purchases and redemptions?
3:00 pm
Cut-off time for liquid/overnight fund purchases?
1:30 pm — and the applicable NAV is the previous calendar day's closing NAV
Maximum bank accounts registrable per folio?
5 for individual investors, 10 for non-individual investors
Timeline for the Annual Report / abridged summary to reach unit-holders?
Within 4 months of the financial year close
UBO disclosure threshold for a company investor?
More than 25% of shares or profits (15% for partnerships and trusts)
Amount always payable during a gating (redemption restriction) event?
The first Rs. 2 lakh of any redemption request
Maximum duration a gating restriction can last?
10 working days within any rolling 90-day period
Since when must schemes benchmark to the Total Return Index (TRI)?
February 1, 2018
Typical historical gap between PRI and TRI returns in Indian markets?
About 1.5% to 2.5% (the dividend yield captured by TRI)
Recommended minimum track record to evaluate before selecting an equity fund?
At least 5 years (3 years for long-duration debt funds)