Investor Services is worth 20% of NISM Series V-B — ten of the fifty questions, more than any other chapter. It is the chapter a new cadre distributor lives in every day: the form, the payment, the NAV the investor gets, the statement that arrives afterwards.
Nothing in it is difficult. All of it has to be known precisely.
Who can invest
Resident individuals (singly or jointly, up to three holders), minors through a guardian, HUFs, companies, partnerships, trusts, banks, and NRIs and PIOs on a repatriable or non-repatriable basis. FPIs invest through a custodian.
A folio held by a single holder must carry a nomination or an explicit opt-out; joint holders may nominate too.
KYC and the application
KYC is done once, centrally, and is checked against the KRA records on every application. PAN is mandatory, with the usual exemptions for micro-investments. The application must carry the ARN and EUIN of the distributor — or "Direct" if none — and the investor's bank details, because redemptions are paid only to the registered bank account.
Payment — and the third-party rule
Payment must come from the investor's own bank account. Third-party payments are refused, with exactly three exceptions:
- A parent or grandparent (or related person) paying for a minor, up to Rs 50,000 per purchase or SIP instalment.
- An employer paying for an employee through payroll deduction.
- A custodian paying on behalf of an FPI.
Cash is accepted only within tight limits per investor per fund per financial year; e-wallets likewise, and only for money loaded by cash — not by credit card or cashback.
Allotment and statements
An NFO other than an ELSS may stay open for at most 15 days. Units are allotted within 5 business days of NFO closure, and a rejected application is refunded within 5 business days. Investors who quoted a demat account get units credited there.
An account statement follows every transaction. The Consolidated Account Statement (CAS), consolidated across fund houses by PAN, is sent monthly when there has been a transaction and half-yearly — for the periods ending September and March — when there has not. That half-yearly rule is a favourite True/False item.
Cut-off times and applicable NAV
The NAV an investor gets depends on when the application is time-stamped and, for purchases, when the money is realised by the scheme. An application before the cut-off time with funds realised the same day gets that day's NAV; after the cut-off, the next business day's. The exact cut-off differs between liquid schemes and others, and the exam expects you to know that the difference exists and that realisation of funds, not just submission, drives the purchase NAV.
SIP, SWP and STP
Three systematic transactions, three directions:
- SIP — money in, a fixed amount at regular intervals. Rupee-cost averaging; no need to time the market.
- SWP — money out, a fixed amount redeemed at regular intervals. With an exit load, more units must be redeemed to produce the same rupee amount.
- STP — money across, a fixed amount switched from one scheme to another — typically parked in a liquid fund and moved into an equity fund over months.
Redemption
The repurchase price is the applicable NAV less any exit load. Proceeds go to the registered bank account within the SEBI-mandated timeline; a delay costs the fund house interest to the investor.
Nomination and transmission
Nomination can be made at application or any time after, in favour of one or more nominees in the manner SEBI specifies, and can be changed by the holder. Transmission is the transfer of units on the death of a holder — to the surviving joint holder, else to the nominee, else to the legal heir on the strength of the documents the fund requires.
What the exam does with this chapter
Questions are single-fact and precise: how many days, which NAV, whose cheque, when the CAS goes. The chapter rewards a list learned cold and punishes a general impression.
Practise the chapter free — the largest set in the V-B bank, with an explanation and a memory hook on every question.