n NISM Certifications
V-A NISM Series V-A
Medium

Identify from the following practices, which is/are NOT an approved practice by a registered mutual fund distributor? (A) Not levying transaction charges on investors based on the value of their investments (B) Attracting new investors by offering them monetary incentives

Practice question from Nism VA Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    Only A is not approved

  2. B

    Only B is not approved

  3. Both of the above are not approved

    Correct answer

  4. D

    None of the above are not approved

Why this is the answer

Mutual fund distributors must adhere to SEBI guidelines, which prohibit them from offering monetary incentives or rebates to investors. They are also required to avoid unethical practices and should not base recommendations on financial incentives.

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