Notifications 11
Module 1: Mutual Fund Distributors.
I. INVESTMENT LANDSCAPE
A. Investors and their Financial Goal.
B. Savings and Investment.
C. Different Asset Classes.
D. Investment Risks.
E. Risk Measure and Management Strategies.
F. Behavioral Biases in Investment Decision Making.
G. Risk Profiling.
H. Understanding Asset Allocation.
I. Do-it-yourself versus Taking Professional Help.
II. CONCEPT AND ROLE OF A MUTUAL FUND
A. Concept of a Mutual fund.
B. Classification of Mutual Funds.
C. Growth of the mutual fund industry in India.
III. LEGAL STRUCTURE OF MUTUAL FUNDS IN INDIA
A. Structure of Mutual Funds in India.
B. Key Constituents of a Mutual Fund.
C. Organization Structure of Asset Management Company.
D. Role and Support function of Service Providers.
E. Role and Function of AMFI.
IV. LEGAL AND REGULATORY FRAMEWORK
A. Role of Regulators in India.
B. Role of Securities and Exchange Board of India.
C. Due Diligence Process by AMCs for Distributors of Mutual Funds.
D. Investor Grievance Redressal Standards.
E. AMFI Code of Conduct for Intermediaries of Mutual Funds.
V. SCHEME RELATED INFORMATION
A. Mandatory Documents.
B. Non-Mandatory Disclosures.
VI. FUND DISTRIBUTION AND CHANNEL MANAGEMENT PRACTICES
A. The role and importance of mutual fund distributors.
B. Different kinds of mutual fund distributors.
C. Modes of distribution.
D. Pre-requisites to become Distributor of a Mutual Fund.
E. Revenue for a mutual fund distributor.
F. Commission Disclosure mandated by SEBI.
G. Due Diligence Process by AMCs for Distributors of Mutual Funds.
H. Difference between distributors and Investment Advisors.
I. Nomination facilities to Agents/Distributors and Payment of Commission to Nominee.
J. Change of distributor.
VII. NET ASSET VALUE, TOTAL EXPENSE RATIO AND PRICING OF UNITS
A. Fair Valuation Principles.
B. Computation of Net Assets of Mutual Fund Scheme and NAV.
C. Dividends & Distributable Reserves.
D. Concept of Entry and Exit Load and its impact on NAV.
E. Key Accounting and Reporting Requirements.
F. NAV, Total expense ratio and pricing of units for the Segregated Portfolio.
VIII. TAXATION
A. Applicability of taxes in respect of mutual funds.
B. Capital Gains.
C. Dividend income.
D. Stamp Duty on Mutual Fund Units.
E. Setting off of Capital Gains and Losses under Income Tax Act.
F. Securities Transaction Tax.
G. Tax benefit under Section 80C of the Income Tax Act.
H. Tax Deducted at Source.
I. Applicability of GST.
IX. INVESTOR SERVICES
A. The NFO process.
B. New Fund Offer Price/On-going Offer Price for subscription.
C. Investment Plans and Services.
D. Allotment of Units to the Investor.
E. Account statements for investments.
F. Mutual Fund Investors.
G. Filling the Application Form for Mutual Funds.
H. Financial Transactions with Mutual Funds.
I. Cut-off Time and Time Stamping.
J. KYC Requirements for Mutual Fund Investors.
K. Systematic Transactions.
L. Operational aspects of Systematic Transactions.
M. Non-Financial Transactions in Mutual Funds.
N. Change in Status of Special Investor Categories.
O. Investor transactions – turnaround times.
X. RISK, RETURN AND PERFORMANCE OF FUNDS
A. General and Specific Risk Factors.
B. Factors that affect mutual fund performance.
C. Drivers of Returns and Risk in a Scheme.
D. Measures of Returns.
E. SEBI Norms regarding Representation of Returns by Mutual Funds in India.
F. Risks in fund investing with a focus on investors.
G. Measures of Risk.
H. Certain Provisions with respect to Credit risk.
XI. MUTUAL FUND SCHEME PERFORMANCE
A. Benchmarks and Performance.
B. Price Return Index or Total Return Index.
C. Basis of Choosing an appropriate performance benchmark.
D. Benchmarks for equity schemes.
E. Benchmarks for Debt Schemes.
F. Benchmarks for Other Schemes.
G. Quantitative Measures of Fund Manager Performance.
H. Tracking Error.
I. Scheme Performance Disclosure.
XII. MUTUAL FUND SCHEME SELECTION
A. Scheme Selection based on Investor needs, preference and risk-profile.
B. Risk levels in mutual fund schemes.
C. Scheme Selection based on investment strategy of mutual funds.
D. Selection of Mutual Fund scheme offered by different AMCs or within the scheme category.
E. Selecting options in mutual fund schemes.
F. Do’s and Don’ts while selecting mutual fund schemes.
Module 2: Equity Derivatives
XIII: BASICS OF DERIVATIVES
A. Understanding Derivatives.
B. Financial derivatives and factors influencing the growth of derivatives markets globally.
C. Derivative Products in India.
D. Market participants and their roles.
E. OTC versus exchange traded markets.
F. Importance of derivatives and the key risks faced by market participants.
XIV: UNDERSTANDING INDEX
A. Index and its economic purpose.
B. Types of Indices and their computation.
C. Index Construction and Impact Cost.
D. Index Construction, Maintenance, and Revision.
E. Equity indices in India.
F. Applications of indices.
XV: INTRODUCTION TO EQUITY FUTURES AND FORWARDS
A. Forward Contracts: Features and Drawbacks.
B. Futures contract: Features and Drawbacks.
C. Contract specification of Exchange Traded Equity Futures.
D. Futures Contract Terminology.
E. Advantages and Disadvantages of forwards and futures.
F. Long–Short Futures Payoffs.
G. Cost-of-carry model and Expectations model for futures pricing.
H. Cash–Futures Price Convergence.
I. Uses/Applications of equity futures.
XVI: INTRODUCTION TO EQUITY OPTIONS
A. Option Contracts and Terminology.
B. Contract specifications of Exchange Traded Equity Options contracts.
C. Option Moneyness: ITM, ATM, OTM.
D. Intrinsic value and Time value of Options.
E. Payoff diagrams of call and put options.
F. Futures versus Options Contracts.
G. Option Pricing, Determinants and Greeks.
I. Option Pricing Models Overview.
J. Implied volatility and its significance.
K. Call and Put Option Profitability.
XVII: STRATEGIES USING EQUITY FUTURES AND EQUITY OPTIONS
A. Strategies for hedging, trading and arbitrage using equity futures.
B. Option Trading Strategies.
C. Put-Call Parity and Synthetic Option Strategies.
D. Delta-hedging.
E. Trading Strategies Using Open Interest, Volume, Futures Price and Put-Call Ratio.
Module 3: Interest Rate Derivatives.
XVIII: INTRODUCTION TO INTEREST RATE, INTEREST RATE INSTRUMENTS AND FIXED INCOME MARKET
A. Interest Rate.
B. Understanding Fixed Income Securities.
C. Bond Classification by Criteria.
D. Equity versus Debt securities.
E. Risk-free Interest Rate.
F. Term Structure of Interest Rates.
G. Interest Rate Conversion Methods.
H. Accrued Interest.
I. Spot Rate (or zero rate) and Holding Period Return.
J. Coupon, Current yield, Yield-to-maturity.
K. Cash flow, Yield and Price of Bonds.
L. Macaulay Duration, Modified Duration, Rupee Duration, Price value of a basis point (PVBP) and Convexity.
M. Debt Markets: Role and Economic Development.
N. Primary and Secondary Markets for Debt Securities in India.
XIX: INTEREST RATE DERIVATIVES
A. Derivatives and Its Economic Role.
B. Forwards, Futures, Options and Swaps.
C. Factors driving the growth of financial derivatives.
D. Interest Rate Derivatives Market Players.
E. Interest Rate Derivatives and Bond Derivatives.
F. Over-The-Counter (OTC) versus Exchange Traded Derivatives.
XX: EXCHANGE TRADED INTEREST RATE FUTURES
A. Interest Rate Futures (IRF).
B. Pay-Off Diagram of Futures.
C. Interest Rate Futures Contract Specifications.
D. Tick size and its relation to the minimum change in the contract value.
E. Rationale for Interest Rate Derivatives.
F. Advantages and Limitations of Futures Contracts.
G. Interest Rate Futures Price.
XXI: EXCHANGE TRADED INTEREST RATE OPTIONS
A. Options Contracts.
B. Futures versus Options Contracts.
C. European versus American options.
D. Option Moneyness: ITM, ATM, OTM.
E. Option Pricing Factors and Greeks.
F. Models for Options Pricing.
G. Implied Volatility.
H. Payoff Diagrams of Put Options and Call Options.
I. Contract Specifications for Interest Rate Options Contracts.
J. Advantages and Limitations of Exchange Traded Options Contracts.
XXII: STRATEGIES USING EXCHANGE TRADED INTEREST RATE FUTURES AND OPTIONS
A. Hedgers, Speculators and Arbitrageurs in Interest Rate Derivatives Markets.
B. Interest Rate Derivatives for Hedging.
C. Option Trading Strategies and their Payoff Diagrams.
D. Interest Rate Derivatives for speculative transactions (trading).
E. Interest Rate Derivatives Arbitrage Trades.
F. Spread and Spread Trading.
G. Limitations of Interest Rate Derivatives for Hedgers.
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