Curriculum – NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors Certification Examination

I: Investment Landscape
A. Define Investment
B. Investment versus Speculation
C. Know the objectives of Investments
D. Estimating the required rate of return
E. Types of Investments
F. Channels for making investments

II: Introduction to Securities Markets
A. Define Securities Markets
B. Primary and secondary securities markets
C. Market participants and their activities

III: Investing in Stocks
A. Equity as an investment
B. Diversification of risk through equity instruments
C. Risks of equity investments
D. Overview of Equity Market
E. Equity research and stock selection
F. Technical Analysis
G. Understanding corporate governance

IV: Investing in Fixed Income Securities
A. Overview of Fixed Income Securities
B. Bond Characteristics
C. Determinants of bond safety
D. Analysis and Valuation of Bonds
E. Measuring price volatility for bonds
F. Determining Duration

V: Derivatives
A. Definition of Derivatives
B. Types of derivative products
C. Structure of derivative markets
D. Purpose of Derivatives
E. Introduction to Commodity and Currency Futures and Options
F. Underlying concepts in derivatives

VI: Mutual Fund
A. Concept and Role of Mutual Fund
B. Benefits of investing through mutual funds
C. Legal Structure of Mutual Fund in India
D. Working of mutual funds
E. Types of Mutual fund products
F. Processes of investing in mutual funds
G. Legal and Regulatory Framework – Key SEBI Regulation
H. Fact Sheet – Scheme Related Information
I. Net Asset Value, Total Expense Ratio, Pricing of Units
J. Mutual Fund Scheme Performance
K. Key performance measures

VII: Role of Portfolio Managers
A. Overview of portfolio managers in India
B. Types of portfolio management services
C. Organizational Structure of PMS in India
D. Registration requirements of a Portfolio Manager
E. General Responsibilities of a Portfolio Manager
F. Administration of investor’s portfolio

VIII: Operational Aspects of Portfolio Managers
A. Entities which can invest in PMS
B. Disclosures to the prospective clients
C. Process of on boarding of clients
D. Direct On-boarding in PMS
E. Liability in case of Default
F. Redressal of Investors grievances
G. Disclosures to the regulator
H. Costs, expenses and fees of investing in PMS

IX: Portfolio Management Process
A. Importance of Asset allocation decision
B. Understanding correlation across asset classes and securities
C. Steps in Portfolio Management Process
D. Asset allocation decision
E. Strategic versus Tactical Asset Allocation
F. Re-balancing of Portfolio

X: Performance measurement and evaluation of Portfolio Managers
A. Parameters to define performance – risk and return
B. Rate of return measures
C. Risk measures
D. Risk adjusted return
E. Performance Evaluation: Benchmarking and peer group analysis
F. Performance attribution analysis
G. Performance reporting to the Investor
H. Due Diligence and Portfolio Manager selection
I. Global Investment Performance Standard (GIPS)
J. GIPS Advertisement Guidelines

XI: Taxation
A. Taxation of investors
B. Taxation of various streams of income
C. Section 9A of Income Tax

XII: Regulatory, Governance and Ethical Aspects of Portfolio Managers
A. Prevention of Money Laundering Act, 2002
B. SEBI (Prohibition of Insider Trading) Regulation 2015
C. SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003
D. Securities and Exchange Board of India (Portfolio Managers) Regulations, 2020
E. Best practices for portfolio Managers