National Institute of Securities Markets (NISM) has launched 5 power-packed NISM exams and certifications for the securities market professionals. The securities markets was pleasantly surprised with the introduction of these examinations which will be a big booster to the industry in the times to come.
With the addition of these 5 exams, NISM now has an extensive bouquet of 30 examinations covering a much wider gamut of capital market industry. NISM is the only institute in India dedicated for development and education in securities market.
Let us try to understand each of the new NISM exams, their assessment structure and how they can benefit you, if you want to take these NISM exams.
NISM Series XX Taxation in Securities Markets Certification Examination
The Indian securities market has wide range of products such as equity, debt, mutual funds, alternate investment funds, portfolio management schemes, REITs, ETFs and so on and so forth. Each product has its own unique structure and a unique taxation structure.
For example, there are numerous types of taxes levied at various levels such as tax on dividends, securities transaction tax, income tax, capital gains tax, etc. Similarly, a debt mutual fund has a different tax structure than in a pure debt product.
Various concepts such as Effective Tax Rate, EEE, EET, ETE, Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT), tax treaty such as Double Tax Avoidance Agreement (DTAA), General Anti-Avoidance Rules (GAAR) are effectively covered in the new exam.
“With the ever changing tax laws and evolving securites market, it was always a challenge to consolidate different tax rules and regulations in the country. NISM, through the NISM Series XX Taxation in Securities Markets has taken this initiative to unify several taxation aspects related to the securites market space.”, said a source related to NISM.
“The new NISM exam covers taxation of all products in Indian markets including AIFs, PMS, NPS, REITs, InVITs, ETFs in detail, also emphasizing taxation of products listed in IFSC, special cases like mergers and acquisitions and the much sought out after – GST implications. The exam will be of great help for various Charatered Accountants, Company Secretaries, Compliance Officers, Income Tax Officers and other employees working in area of taxation”.
This NiSM Exam is presently a voluntary examination, consisting of 75 multiple choice questions (50 questions of 1-mark each and 25 questions of 2-marks each), adding to a total of 100 marks. The exam is of 2 hours and the passing score is 60% including negative marking of 25%.
NISM Series XIXA Alternative Investment Funds (Category I and II) Distributors
11 years after SEBI came up with the Alternate Investment Regulations in 2012, NISM has come up with a standalone certification examination for Alternate Investment Fund Distributors. While AIFs are picking up in India offlate, especially in the Category I and II space, these was no content or certification in this area. The new certification will definitely help the industry and prospective people who want to venture into this space.
Category I funds invest in start-ups or social enterprise funds, infrastructure funds, SME funds, and so on. Category II Funds that do not use leverage or borrow for any reason other than to cover operational needs that do not fall under Categories I or III. This is where Private Equity Funds usually fall. The exam however, does not cover Category III funds which engage in a variety of or complex trading techniques, such as investing in listed or unlisted derivatives.
Hedge funds usually belong to this category. Open-ended funds are classified as Category III AIFs whereas closed-ended funds are classified as Category I and II AIFs.
Since AIFs are high-risk products, the minimum investment limit is kept at Rs. 1 crore or 25 lakh in case of AIF employees, directors and fund managers.
The best performing Alternative Funds in India are Abakkus, Roha, Girik Advisors, Incred Capital, Ampersand Capital, Accuracap Tech, Carnelian Asset Management, Alchemy Capital and Sundram AIFs.
NISM Alternative Investment Funds Distributors Exam covers an overview and history of AIFs in India, the regulatory framework, fund structuring, risk and return concepts both from the perspective of investor and fund manager, investment process, due diligence, legal documentation, fund monitoring, valuation, taxation and best practices.
This NISM exam is an excellent one to create a niche in the AIF sector. It is presently a voluntary exam and consists of 80 multiple choice questions and 5 case-based questions (each case having 4 questions). It is a 2 hours exam with passing score of 60 marks with 25% negative marking.
NISM Series XXII Fixed Income Securities Certification Examination
The Fixed Income Securities is the most sought ought after exam which was most long awaited by many securities market participants. Many professionals, especially in Indian markets wanted a credible source of learning in the area of Fixed Income and NISM Fixed Income Securities Exam fills up this gap.
The exam covers, in detail, an overview of Indian Debt Market, types, risks and pricing of bonds, government and corporate debt market, yield measures, total return with a special emphasis on interest rate risk.
It touches upon detailed classification of fixed income securities based on various criteria such as issuer, maturity, coupon, currencies, embedded options, etc. Pricing of bonds including floating rate bond, price-yield relationship and price time path of a bond are covered in greater detail.
The exam is of 100 marks with 85 questions and the passing score is 60 marks. The fees for the certification is Rs. 1500 plus GST.
NISM Series XXIA Portfolio Management Services (PMS) Distributors Certification Examination
Similar to Mutual Fund Distributors, Distributors of PMS Schemes will also soon be required to pass an NISM examination. While SEBI has not yet made this examination mandatory, chances are highly likely that this will happen soon.
The NISM Series XXIA Portfolio Management Services Distributors Certification or PMS Distributors Examination will be the exam that these PMS Agents or PMS Distributors be required to pass.
This NISM exam covers basics of investments, securities markets, investing in stocks, fixed income securities, derivatives and mutual funds. There is a special emphasis on the role of portfolio managers, operational aspects of portfolio management services and portfolio management process, performance measurement and evaluation of portfolio managers. Taxation and regulatory aspects, governance and ethical aspects of portfolio managers and PMS distributors are also covered in greater details in the exam.
The exam is of 2 hours and consist of 80 multiple choice questions (MCQs) of 1 mark each, 2 cases with 5 questions per case of 1 mark each and 1 case with 5 questions of 2 marks each.
The passing score for the exam is 60 percent and there is a negative marking of 25 percent per wrong answer.
PAN Card is mandatory for all candidates appearing for any of the NISM Certification Examination.
NISM Series XXIB Portfolio Managers Certification Examination
If NISM Series XXIA PMS Distributors exam was launched for distributors of PMS schemes, NISM has also gone a step further by launching a separate exam for principal officers and employees of PMS firms. This is a rather tough exam in comparison with the PMS Distributors exam and requires detailed knowledge of the subject matter.
The exam for the first time has introduced topics such as information efficiency, behavioural finance, modern portfolio theory in addition to equity and fixed income portfolio management strategies. Furthermore, the exam discusses detailed role of portfolio managers on an everyday basis such as operational aspects, portfolio management process, performance measurement and evaluation process of portfolio managers.
Taxation, regulatory, governance and ethical aspects are covered similar to the PMS distributors exam.
The exam is of 3 hours and has 60 multiple choice questions (MCQs) of 1 mark each. In addition, the exam has 9 caselets with 5 questions of 2 marks each. Overall the exam is of 150 marks and passing marks.
Candidates passing this exam would have a very promising career option in PMS, MF and other fund management space.
The fees for this NISM exam is ₹3000 plus GST.
For more information on other NISM Exams, please visit our Certification section.