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

While empaneling mutual fund distributors, an AMC has to do a due diligence to satisfy the 'Fit and Proper' criteria for eligible distributors. Which of the following form a part of this due diligence process?

Practice question from Nism VA Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    The eligible distributor should have the requisite Employee to Customer ratio as prescribed by SEBI

  2. B

    The eligible distributor should have strict internal controls to limit investors' exposure to an asset class or fund house

  3. Adequate controls to delink sales functions from customer risk and investment objective evaluation

    Correct answer

  4. D

    All of the above

Why this is the answer

The due diligence process includes assessing business model, experience, regulatory record, and organizational controls. It ensures sales functions are separated from risk and investment evaluation processes.

Test yourself for real

Take a full NISM Series V-A mock test.

Same duration, same weighting, same difficulty distribution as the real exam — with explanations on every question.

Nism VA Mock Test 6