NISM Series XIX-D : Category I and II Alternative Investment Fund Managers Certification Examination

NISM Series XIX-D Mock Test

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AIF Managers 19D
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It's Series 19D. 'XIX' is Roman Numeral for 19.

Official name is NISM Series XIX-D: Category I and II Alternative Investment Fund Managers Certification Examination. Also known as NISM 19D, NISM XIX-D, AIF Manager (Cat 1 & 2) exam, etc.

This exam creates a common minimum knowledge benchmark for Category I and II AIF Managers and their investment teams. It focuses on features of AIF products, valuation norms, governance, performance measurement, taxation, and regulations.

An AIF Manager is a person or entity responsible for managing AIFs (funds investing in assets outside traditional stocks/bonds like PE, VC, Real Estate, etc.).

  • Fund Managers and Investment Professionals of Cat I & II AIFs.
  • Compliance Officers and Legal Advisors.
  • Trustees and Custodians.
  • Senior Management of AIFs.
  • Aspiring AIF Managers.

Assessment Structure

Total Marks 100
Total Questions Multiple Choice [60 x 1 = 60]
Case-based [4 cases x 5 marks = 40]
Total Duration 2 Hours
Passing Score 60%
Negative Marking 25% (0.25 mark)

Syllabus & Weightage

Unit No. Unit Name Weightage
Unit 1 & 2 Investments Landscape & Types of Investments 2%
Unit 3 Alternative Investment Funds in India and its Suitability 2%
Unit 4 Alternative Investment Funds Ecosystem 5%
Unit 5 Alternative Investment Fund Structuring 10%
Unit 6 Fee Structure of AIFs 10%
Unit 7 Fund Performance and Benchmarking of AIFs 10%
Unit 8 Legal Documents and Negotiations 6%
Unit 9 Investment Strategies 10%
Unit 10 Investment Process and Governance of Funds 10%
Unit 11 Valuation 10%
Unit 12 Fund Monitoring, Reporting and Exit 10%
Unit 13 Taxation 5%
Unit 14 Regulatory Framework 10%

Detailed Syllabus

Section A: Basics of Investments

Chapter 1: Investments Landscape
  • *Define Investment vs Speculation
  • *Objectives of Investments
  • *Estimating required rate of return (Risk Premium, Nominal/Real rates)
  • *Types of risks (Business, Liquidity, Market etc.)
  • *Overview of Indian Securities Markets
Chapter 2: Types of Investments
  • *Traditional (Equity, Fixed Income) vs Alternate Investments
  • *Types of Alternates: PE, VC, Hedge Funds, Real Estate, Distressed Securities
  • *Channels: Direct / Managed Portfolios (MF, PMS, AIF)
  • *Role in portfolio, global evolution

Section B: Understanding the AIF Ecosystem

Chapter 3: AIF in India & Suitability
  • *Evolution and growth; SEBI Categories (I, II, III)
  • *Suitability for investors (HNI/Institutional)
  • *Role in Portfolio Diversification & Risk Management
Chapter 4: AIF Ecosystem
  • *Key Players: Investors, Sponsors, Trustees, Managers
  • *Service Providers: Admins, Distributors, Custodians etc.
  • *Key Concepts: Capital Committed, Drawdown, Waterfalls, Hurdle Rate
  • *Fees: Management, Setup, Carried Interest
Chapter 5: AIF Structuring
  • *Pooling concept, Jurisdiction choice (Onshore/Offshore)
  • *Trust vs LLP vs Company structure
  • *Unified, Co-investment, Master-Feeder structures
Chapter 6: Fee Structure
  • *Management & Incentive Fees calculation
  • *Hurdle Rate, High Watermark, Catch-up, Clawback
  • *Pre vs Post fee returns
Chapter 7: Fund Performance & Benchmarking
  • *Risk areas: Investor Level & Fund Level
  • *Approaches: IRR (Gross/Net), J-Curve, TVPI, DPI, RVPI
  • *Other metrics: TVPI, DPI, KS-PME, Direct Alpha, MOIC
  • *Benchmarking importance and agencies
Chapter 8: Legal Documents
  • *PPM, Trust Indenture, Subscription Agreement
  • *Investment Management Agreement, Distribution Agreement
  • *Side Letters, Preferential Rights

Section C: Managing AIF Investments & Section D

Chapter 9 & 10: Strategy & Process
  • *Equity Strategies, Deal Sourcing
  • *Deal Stages: Assessment, DD, Negotiation, Term Sheet
  • *Definitive Agreements, Rights (Tag-along, Drag-along etc.)
  • *Governance: IC Role, Conflicts of Interest
Chapter 11: Valuation
  • *Approaches: Income (DCF), Market (Multiples)
  • *Enterprise vs Equity Value
  • *NAV Concept, Role of Valuers, IPEV Guidelines
Chapter 12: Monitoring & Exit
  • *Fund Monitoring scope
  • *Periodic Reporting (Regulatory/Contractual)
  • *Exit Options: IPO, Strategic Sale, Secondary Sale, Buyback
Chapter 13 & 14: Taxation & Regulatory
  • *Tax Pass-through concept
  • *Taxation of AIF (Trust/LLP), Business Income vs Capital Gains
  • *Withholding tax, Investor reporting
  • *SEBI (AIF) Regulations 2012 detailed framework