Performance measurement and evaluation
of portfolio managers
10
Unit 11
Taxation
05
Unit 12
Regulatory, governance and ethical
aspects of portfolio managers
10
Assessment Structure: Exam Pattern for NISM PMS Distributors
The examination consists of 100 multiple choice questions. The assessment structure is as follows:
Multiple Choice Questions
[100 questions of 1 mark each]
100 x 1 = 100 marks
The examination should be completed in 2 hours. The passing score for the examination is 60 percent. There shall be negative marking of 10 percent of the marks assigned to a question.
Test Details
100 multiple choice questions of 1 mark each.
Negative marking – 10% of the marks assigned to the question.
Syllabus
I: Investment Landscape
Define Investment
Investment versus Speculation
Know the objectives of Investments
Estimating the required rate of return
Various types of risks
Types of Investments - Role and Characteristics
channels for making investments
Investments through managed portfolios
II: Introduction to Securities Markets
Define Securities Markets
Primary and secondary securities markets
Market participants and their activities
Various market participants and their activities
III: Investing in Stocks
Equity as an investment
Risks of equity instruments
Diversification of risk through equity instruments
Equity research and stock selection
Understand Estimation of intrinsic value
Explain Technical Analysis
IV: Investing in Fixed Income Securities
Overview of Fixed Income Securities
Bond Characteristics
Determinants of bond safety
Valuation of Bonds
Measuring price volatility for bonds
V: Derivatives
Definition of Derivatives
Types of derivative products
Structure of derivative markets
Purpose of Derivatives
Introduction to Commodity and Currency Futures and Options
Underlying concepts in derivatives
Derivatives in PMS
VI:Collective Investment Vehicles
Concept and Role of Collective Investment Vehicles
Legal Structure of Mutual Fund, ReITS, InvITs and AIFs
Types and Working of Mutual Funds, ReITS, InvITs and AIFs
VII: Role of Portfolio Managers
Overview of portfolio managers in India
Types of portfolio management services
Organizational Structure of PMS in India
General Responsibilities of a Portfolio Manager
Administration of investor’s portfolio
VIII: Operational Aspects of Portfolio Managers
Entities which can invest in PMS
Disclosures to the prospective clients
Process of on boarding of clients
Liability in case of Default
Redressal of Investors grievances
Disclosures to the regulator
Costs, expenses and fees of investing in PMS
IX: Portfolio Management Process
Importance of Asset allocation decision
Understanding correlation across asset classes and securities
Steps in Portfolio Management Process
Asset allocation decision
Re-balancing of Portfolio
X: Performance measurement and evaluation of Portfolio Managers
Parameters to define performance – risk and return
Rate of return measures
Risk measures
Risk adjusted return
Performance Evaluation: Benchmarking and peer group analysis
Performance attribution analysis
Performance reporting to the Investor
Valuation of Securities by Portfolio Manager
Due Diligence and Portfolio Manager selection
XI: Taxation
Categories of Investors
Taxation of different asset classes
Understand if Fees and Expenses are tax deductible
Tax Reporting and Compliance
Portfolio Investment Scheme for NRIs
XII: Regulatory, Governance and Ethical Aspects of Portfolio Managers
Prevention of Money Laundering Act, 2002
SEBI (Prohibition of Insider Trading) Regulation 2015
SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003
Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020
Investor Charter for Portfolio Management Services
