Curriculum

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

CHAPTER 1: INVESTMENTS

1. What is Investment?

2. Investment versus Speculation

3. Investment Objectives

4. Estimating the required rate of return

5. Types of Risks in Investments

6. Types of Investments

7. Channels for making investments

CHAPTER 2: INTRODUCTION TO SECURITIES MARKETS

1. Securities Market

2. Primary and Secondary market

3. Market Participants and their Activities

CHAPTER 3: INVESTING IN STOCKS

1. Equity as an investment

2. Risks of equity investments

3. Diversification of risk in equity investments

4. Equity research and stock selection

5. Estimation of intrinsic value

6. Technical Analysis

CHAPTER 4: INVESTING IN FIXED INCOME SECURITIES

1. Overview of Fixed Income Securities

2. Bond Characteristics

3. Determinants of bond safety

4. Valuation of Bonds

5. Measuring Price Volatility of bonds

CHAPTER 5: DERIVATIVES

1. Definition of Derivatives

2. Types of derivative products

3. Structure of derivative markets

4. Purpose of Derivatives

5. Commodity and Currency Derivatives

6. Underlying concepts in derivatives

7. Investment in Derivatives in PMS

CHAPTER 6: COLLECTIVE INVESTMENT VEHICLES

1. Types of Collective Investment Vehicles

2. Legal Structure of Mutual Funds, ReITS, InvITs and AIFs

3. Types of Mutual Funds, ReITS, InvITs and AIFs

CHAPTER 7: ROLE OF PORTFOLIO MANAGERS

1. Overview of Portfolio Management Services in India

2. Types of portfolio management services

3. Organizational structure of PMS in India

4. General Responsibilities of a Portfolio Manager

5. Administration of investor’s portfolio

CHAPTER 8: OPERATIONAL ASPECTS OF PORTFOLIO MANAGERS

1. Entities which can invest in PMS

2. Disclosures to the prospective clients

3. Process of On-boarding of clients

4. Liability in case of Default

5. Redressal of investors grievances

6. Disclosures to the regulator

7. Costs, expenses and fees of investing in PMS

8. Performance reporting to the Investor

CHAPTER 9: PORTFOLIO MANAGEMENT PROCESS

1. Importance of Asset Allocation Decision

2. Understanding correlation across asset classes

3. Steps in Portfolio Management Process

4. Asset allocation decision

5. Rebalancing of Portfolio

CHAPTER 10: PERFORMANCE MEASUREMENT AND EVALUATION OF PORTFOLIO MANAGERS 136

1. Rate of return measures

2. Risk measures

3. Risk-adjusted return

4. Performance Evaluation: Benchmarking and peer group analysis

5. Performance attribution analysis

6. Valuation of Securities by Portfolio Managers

7. Due Diligence and Portfolio Manager selection

CHAPTER 11: TAXATION

1. Categories of Investors

2. Tax Treatment of Different Asset Class

3. Fees and Expenses – Are They Tax Deductible?

4. Tax Reporting and Compliance

5. Portfolio Investment Scheme (PIS) for NRIs

CHAPTER 12: REGULATORY, GOVERNANCE AND ETHICAL ASPECTS OF PORTFOLIO MANAGERS

1. Prevention of Money Laundering Act, 2002
2. SEBI (Prohibition of Insider Trading) Regulations 2015
3. SEBI (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Market) Regulations, 2003
4. SEBI (Portfolio Managers) Regulations, 2020
5. Code of conduct for PMS Distributors
6. Investor Charter for Portfolio Management Services