n NISM Certifications
X NISM Series X
Medium

Which statement is TRUE regarding ‘Side Letters’?

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 5 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Private arrangements with select investors

    Correct answer

  2. B

    Required to create distribution waterfall

  3. C

    Not necessary to disclose to all investors

  4. D

    Can discriminate between investors unfairly

Why this is the answer

Side letters are private agreements tailored for specific investors, often containing preferential terms, and are not disclosed universally.

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