NISM Series V-A: Mutual Fund Distributors 'Final Test'

Explanation:

The basic meaning of asset allocation is to allocate an investor’s money across asset categories (like Equity, Debt, Gold etc.) in order to achieve the objective.

Explanation:

NSE’s MIBOR (Mumbai Inter-Bank Offered Rate) is based on short term money market. Liquid schemes invest in securities of upto 91 days’ maturity. Therefore, a short term money market benchmark such as NSE’s MIBOR is suitable.

Explanation:

Close-ended Schemes have an NFO Open Date and NFO Close Date. But, they have no Scheme Re-opening Date, because the scheme does not sell or re-purchase units. What ever sale-purchase of units takes place is between the investors on the stock exchange. So the unit capital of a closed-end fund does not change.

(The number of units issued by a scheme multiplied by its face value (Rs. 10) is the capital of the scheme–its Unit Capital).

Explanation:

Statement of Additional Information (SAI), has statutory information about the mutual fund or AMC, that is offering the scheme. Therefore, a single SAI is relevant for all the schemes offered by a mutual fund.

(Scheme Information Document (SID) has details of the particular scheme)

Explanation:

As per the Income Tax Act –

– Short term capital loss is to be set off against short term capital gain or long term capital gain.
– Long term capital loss can only be set off against long term capital gain.
– Capital loss, short term or long term, cannot be set off against any other head of income (e.g. salaries).

Explanation:

When the performance of a particular mutual fund scheme is advertised, the advertisement shall also include the performance data of all the other schemes managed by the fund managers of that particular scheme.In case the number of schemes managed by a fund manager is more than six, then the AMC may disclose the total number of schemes managed by that fund manager along with the performance data of top 3 and bottom 3 schemes managed by that fund manager in all performance related advertisements.

Explanation:

Interest rate risk is the risk that an investment’s value will change as a result of a change in interest rates. Interest rate risk is always associated with debt funds and not equity funds.

The interest rate risk varies for bonds with different maturities. Those with longer maturity would witness higher price fluctuations in comparison to those with shorter maturities. A money market fund is a type of a mutual fund that invests in high quality, short term debt instruments, cash and cash equivalents.

Explanation:

Suppose an investor has invested in a debt security that yields a return of 8 percent. Subsequently, yields in the market for similar securities rise to 9 percent. It stands to reason that the security, which was bought at 8 percent yield, is no longer such an attractive investment. It will therefore lose value.

(Conversely, if the yields in the market go down, the debt security will gain value. Thus, there is an inverse relationship between yields and value of such debt securities, which offer a fixed rate of interest).

Explanation:

The first step in financial goal setting is to identify events in life which will require major funding – like child education, marriage, retirement etc.

Asset allocation / Risk profile are looked into later while deciding the investments etc.

Explanation:

To cater to people with small saving potential and to increase reach of mutual fund products in urban areas and smaller towns, SEBI has allowed a transaction charge per subscription of Rs. 10,000/- and above to be paid to distributors of the mutual fund products. However, there shall be no transaction charges on direct investments.

Explanation:

Corporate Bond Fund: An open-ended debt scheme predominantly investing in AA+ and above rated corporate bonds. The minimum investment in corporate bonds shall be 80 percent of total assets (only in AA+ and above rated corporate bonds).

Explanation:

In a dividend pay-out option, the fund declares a dividend from time to time. When a dividend is paid, the NAV of the units falls to that extent.

Explanation:

Once a mutual fund folio is created as a jointly held account there can be no change in the joint holders or mode of holding – except in the event of a death.

Explanation:

For mutual fund applicants, including guardians, whose country of birth/citizenship/nationality/tax residency is other than India, the application requires additional information under the Foreign Account Tax Compliance Act (FATCA) and Common Reporting Standards (CRS).

Explanation:

Association of Mutual Funds in India (AMFI) is the association of all the registered Asset Management Companies. One of the objectives of AMFI is to undertake nationwide investor awareness programme to promote proper understanding of the concept and working of mutual funds.

Explanation:

In Tactical asset allocation, the allocation between the asset categories changes dynamically. The purpose of such an approach may be to take advantage of the opportunities presented by various markets at different points of time.

Explanation:

In the Risk-Return Hierarchy of mutual funds, Equity funds are always risker then Debt funds. So in the above question, Index fund and Diversified Equity Fund (Equity funds) will be more risker than Gilt fund and Long Duration fund (Debt funds).

Among Index fund and Diversified Equity fund, the latter is usually more riskier than former.

Explanation:

A Hybrid fund is classified into Aggressive, Balanced, and Conservative depending on the equity exposure of the fund.

Conservative Hybrid Fund: An open-ended hybrid scheme investing predominantly in debt instruments. Investment in debt instruments shall be between 75% and 90% of total assets while investment in equity instruments shall be between 10 percent and 25% of total assets.

Balanced Hybrid Fund: An open-ended balanced scheme investing in equity and debt instruments. The investment in equity-related instruments shall be between 40 percent and 60% of total assets while investment in debt instruments shall be between 40% and 60%.

Aggressive Hybrid Fund: An open-ended hybrid scheme investing predominantly in equity instruments. Investment in equity instruments shall be between 65% and 80% of total assets while investment in debt instruments shall be between 20% and 35% of total assets.

Explanation:

Investors of an open ended fund can buy and sell mutual fund units as per its current Net Asset Value – NAV price.

Explanation:

Compliance with the KYC norms and providing the PAN details are mandatory by the third party making the payment irrespective of the amount involved.

The third party need not have a folio with the mutual fund.

Explanation:

The SEBI Regulations provide for various limits to the kind of investments that are possible in mutual fund schemes. One of the restriction is –

The Mutual Fund under all its schemes shall not own more than 10 percent of a company’s paid up capital bearing voting rights. Provided no sponsor of a mutual fund, its associate or group company including the Asset Management Company of the fund, through the schemes of the mutual fund or otherwise, individually or
collectively, directly or indirectly, have 10 percent or more of the shareholding or voting rights in the asset management company or the trustee company of any other mutual fund.

Explanation:

Investors may choose the close-ended funds only if they can keep the money locked-in such schemes. Although they are listed on stock exchanges, many a times there is very low liquidity / volumes and also the price could be lower than NAV.

Anyone, who prefers liquidity option, should consider investing in open-ended funds.

Explanation:

Updation of SAI – Regular update has to be done by the end of 3 months of every financial year.

(Material changes have to be updated on an ongoing basis and uploaded on the websites of the mutual fund and AMFI)

Explanation:

Gold price would be the benchmark for Gold ETF funds.

For International Funds – The benchmark would depend on where the scheme proposes to invest. Thus, a scheme seeking to invest in China might have a Chinese index as the benchmark and a scheme that would invest largely in the US market can have S&P 500 index as the appropriate benchmark.

Explanation:

Historically, equity investing has delivered higher returns than other investment avenues, most of the times, if one considers long investment periods.

Equity share prices generally fluctuate a lot, often without regard to the business fundamentals. However, over long periods of time, the share prices follow the fortunes of the firm. If the profits of the company continue to grow over the years, the share price follows.

(In Fundamental Analysis, one does not study the charts like Candle Stick chart etc. Study of charts is done in Technical Analysis).

Explanation:

The trustees shall not permit a change in the fundamental attributes of the scheme or any other change that will affect the interests of the unit holders unless a written communication is sent to each unitholder, a notice is given in the newspaper with national circulation and the unitholders are given the option to exit at NAV without paying an exit load.

Explanation:

The cover page of Scheme Information Document (SID) has the following standard clause – “The particulars of the Scheme have been prepared in accordance with the Securities and Exchange Board of India (Mutual Funds)
Regulations 1996, as amended till date, and filed with SEBI, along with a Due Diligence Certificate from the AMC (Asset Management Company).

Explanation:

Investors have the option to invest (purchase or subscribe to mutual fund units) directly without routing the investment through a distributor (Direct Plan). In this case, the investor must mention “Direct” in the space provided in the application form for entering the AMFI Registration Number (ARN).

Explanation:

An existing investor can use the application form to make fresh purchases in other schemes of the same mutual fund or even make additional purchases in a scheme. In this case, the assigned folio number has to be provided and all the personal information already captured under the folio will apply to the new investment being made also.
(The investors who are exempt from providing a PAN for their Mutual Fund investments, should quote their PAN Exempt KYC Reference No. (PEKRN) obtained from KYC Registration Agency)

Explanation:

One of the objectives of the Association of Mutual Funds in India (AMFI) is to promote the investors’ interest by defining and maintaining high ethical and professional standards in the mutual fund industry.

The AMFI Code of Ethics (ACE) sets out the standards of good practices to be followed by the Asset Management Companies (AMCs) in their operations and in their dealings with investors, intermediaries and the public.

Explanation:

SEBI has mandated that the Asset Management Companies (AMCs) should prominently disclose on a daily basis, the Total expense ratio (scheme-wise, date-wise) of all schemes under a separate head – “Total Expense Ratio of Mutual Fund Schemes” on their website.

Explanation:

In the event of a breach of the Code of Conduct by an intermediary, the following sequence of steps is initiated by AMFI:

• Write to the intermediary and ask for an explanation within 3 weeks.

• In case an explanation is not received within 3 weeks, or is not satisfactory, AMFI will issue a warning letter indicating that any subsequent violation will result in cancellation of AMFI registration.

• If there is a proven second violation by the intermediary, the registration will be canceled, and intimation sent to all AMCs.

Explanation:

To ensure fair treatment to all investors in case of a credit event and to deal with the liquidity risk, in December 2018, SEBI permitted creation of segregated portfolio of debt and money market instruments by mutual funds schemes. “Segregated portfolio” means a portfolio, comprising of debt or money market instrument affected by a credit event, that has been segregated in a mutual fund scheme.

Segregated portfolio shall be effective from the day of the credit event.

Explanation:

KIM is a summary of Scheme Information Document (SID) and Statement of Additional Information (SAI) where in all the details of the scheme are mentioned.

Explanation:

The selection of a mutual fund scheme for an investor will depend upon the need that the investor has from the investment. The objective could be a financial goal like reaching a certain level of wealth in a specified period of time; or it could be funding a major expense related to an important life event like education of one’s children or funding one’s retirement. The sight of the goal must never be missed.

Therefore, the first step is to set the financial goals.

Explanation:

There is no TDS on re-purchase proceeds to resident investors. However, for certain cases of non-resident investments, the same is applicable.

(TDS is required to be deducted at 10 percent on the dividend amount if it exceeds Rs. 5,000)

Explanation:

The following categories of investors are exempt from producing PAN:
– In case of transactions undertaken on behalf of Central/State government and by officials appointed by the court.
– Investors residing in the state of Sikkim.
– UN entities/Multilateral agencies exempt from paying taxes/filing tax returns in India.
– Investments (including SIPs and lump sum investments) in Mutual Fund schemes upto Rs. 50,000/- per investor per year per mutual fund.

Explanation:

Purchase and redemption of units are always done based on the NAV of the scheme.

Explanation:

A securitization transaction involves sale of receivables by the originator (a commercial bank, non-banking finance company, housing finance company, or a manufacturing/service company) to a Special Purpose Vehicle (SPV), typically set up in the form of a trust. Investors are issued rated Pass Through Certificates (PTCs), the proceeds of which are paid as consideration to the originator.

In this manner, the originator, by selling his loan receivables to an SPV, receives consideration from investors much before the maturity of the underlying loans.

Explanation:

Indexation means that the cost of acquisition or the cost of purchase is adjusted upwards to reflect the impact of inflation.

For eg. – A stock was purchased at Rs 100 and sold for Rs 150 after 5 years. The long term capital gains is Rs 50 on which tax is to paid. But when adjusted for indexation (as per data released by Central Board of Direct taxes every year), the capital gains will be reduced and the tax will have to be paid on a lower amount.

Explanation:

As per SEBI rules, a mutual fund distributor has to sign a declaration mentioning – Undertake not to rebate commission back to investors, or attract investors through temptation of rebate/gifts, pass back of commission etc.

Explanation:

Distributors need to pass the NISM certification Examination (NISM-Series- V-A: Mutual Fund Distributors (MFD) Certification Examination) and register with AMFI.

Explanation:

A Charitable Trust does not have any Memorandum and Articles of Association. It has a Trust Deed.

Explanation:

Vide SEBI circular dated September 17, 2020, it was decided that with respect to purchase of units of MF schemes – both Debt and Equity (except liquid and overnight schemes), closing NAV of the day shall be applicable, on which the funds are available for utilisation irrespective of the size and time of receipt of such application.

Explanation:

SEBI does not approve or disapprove the Scheme Related Documents, it gives its observations. The mutual fund needs to incorporate these observations in these documents. Thus, the Documents in the market are “vetted” by SEBI, and not approved by SEBI.

Explanation:

AMFI website (www.amfiindia.com) carries the performance data of all the mutual fund schemes.

SEBI has mandated disclosure of performance data by all the asset management companies (AMCs). These disclosures can be accessed through certain scheme documents and website of the fund house.

Explanation:

The difference between a scheme’s actual return and its optimal return is its Alpha—a measure of the fund manager’s performance. Alpha, therefore, measures the performance of the investment in comparison to a suitable market index. Positive alpha is indicative of outperformance by the fund manager; negative alpha might indicate under-performance.

Explanation:

SEBI expects Trustees to perform a key role in ensuring legal compliances and protecting the interest of investors.

Explanation:

Growth investment style entails investing in high growth stocks i.e. stocks of companies that are likely to grow much faster than the market.

(Value investment style is an approach of picking up stocks, which are priced lower than their intrinsic value)

Explanation:

When an Indian investor invests in equities abroad, he is essentially taking two exposures:
• An exposure on the international equity market (asset class)
• An exposure to the exchange rate of the rupee. If the investor invests in the US, and the US Dollar becomes stronger during the period of his investment, he benefits; if the US Dollar weakens (i.e. Rupee becomes stronger), he loses or the portfolio returns will be lower.

Explanation:

STT is not applicable to transactions in debt securities or debt mutual fund schemes.

When an investor sells units of an equity fund in the stock exchange, or offers them for repurchase to the fund, he will have to incur Securities Transaction Tax (STT) i.e. STT is applicable only on redemption/switch to other schemes/sale of units of equity oriented mutual funds whether sold on a stock exchange or otherwise. STT does not apply to the purchase of units of an equity scheme.

Explanation:

As per SEBI regulations – The AMCs are required to send the update to the investors through email whenever there is a change in the expense ratio.

Explanation:

In order to ensure a fair treatment to all investors, SEBI has laid down certain fair valuation principles of mutual fund schemes.

In case of any conflict between the Principles of Fair Valuation and Valuation Guidelines, the Principles of Fair Valuation shall prevail.

Explanation:

A conservative investor is someone who wants his money to grow but does not want to risk his principle investment. Conservative investors choose financial products that do not fluctuate much in value, such as conservative mutual funds

Explanation:

Every scheme has a pre-announced investment objective. Investors invest in a mutual fund scheme whose investment objective reflects their own needs and preference.

The primary objective of various schemes stems from the basic needs of an investor, viz., safety, liquidity, and returns.

Explanation:

Mutual funds provide investors the facility to register multiple bank accounts to facilitate receiving the redemption, dividends and any other pay outs from the fund.

An individual investor can register up to five bank accounts and a non-individual investor, ten.

Explanation:

Mutual fund Investors’ Rights & Obligations –
Rights to terminate the appointment of an AMC: 75 percent of unit holders can terminate the appointment of an AMC. Also, 75 percent of the unitholders (unitholding) can pass a resolution to wind up a scheme.

Explanation:

The process of valuing each security in the investment portfolio of the scheme at its current market value is called Mark to Market (MTM). The mark-to-market valuation is done on a daily basis for calculation of daily NAV of a mutual fund scheme.

Explanation:

Variance as a measure of risk is relevant for both debt and equity schemes.

Beta as a measure of risk is relevant only for equity schemes.

In the debt markets, the credit risk arises on account of three things, viz., default, delay in payments, or rating downgrade. Any of these may result in fall in prices of the concerned debt securities. Such an event is also called a ‘credit event’.

Explanation:

Post-NFO, the sale and purchase transactions of a close ended fund happen on the stock exchange between two different investors, and the mutual fund is not involved in the transaction.

Explanation:

Investors can hold their units even in a fraction of 1 unit.

For example, a investor is holding 650 units in a dividend re-investment scheme of a mutual fund. On announcement of dividend, when converted into units, could result in say addition of 20.5 units. Thus his total holding will become 650 + 20.5 = 670.50 units – which is a fraction.

Explanation:

SEBI has mandated AMCs to put in place a due diligence process to regulate distributors who
qualify any one of the following criteria:
a. Multiple point presence (More than 20 locations)
b. AUM raised over Rs. 100 crore across industry in the non-institutional category but including high networth individuals (HNIs)
c. Commission received of over Rs. 1 Crore p.a. across industry
d. Commission received of over Rs. 50 Lakhs from a single mutual fund

Explanation:

SEBI guidelines stipulate that dividends can be paid out of distributable reserves. In the calculation of distributable reserves:
• All the profits earned are treated as available for distribution.
• Valuation gains are ignored. But valuation losses need to be adjusted against the profits.
• That portion of sale price on new units, which is attributable to valuation gains, is not available as a distributable reserve.

Explanation:

The risks in the scheme are listed in the segment on Risk Factors in Section I, Sub-section A of the Scheme Information Document (SID). This section includes standard or general risk factors that affect all mutual fund schemes.

Explanation:

Charitable Trusts / Private Trusts are considered as institutional investors.

Non-Resident Indians (NRIs)/Persons of Indian Origin (PIO) / HNIs are individual investors.

Explanation:

Passive funds invest on the basis of a specified index; whose performance it seeks to track. For eg. NIfty Index fund.

Exchange Traded Funds (traded on exchanges) are also passive funds that generate returns in line with the index or benchmark.

So, from the above options, only Gold Exchange Traded Fund is a passive fund.

Explanation:

A person who wants liquidity should invest in liquid funds as they can be redeemed very fast.

Equity linked saving schemes (ELSS) have a lock in period of three years

Fixed Deposits and Public Provident Fund (PPF) cannot be easily encashed before maturity.

Explanation:

The AMC has the power to terminate the empanelment of the mutual fund distributor at any time.

Explanation:

Experience has shown time and again, the top performers during one period may not necessarily remain as a top performer forever or near the other top performers and vice versa. In such a case, simply buying into a scheme due to good returns in the recent past may not be a wise approach.

When an investor wants to redeem from a scheme, the distributor must suggest redemption from the scheme with the minimum exit load.

Explanation:

Right to unclaimed amounts- AMC is expected to make a continuous effort to remind the investors through letters to claim their dues. The Annual Report has to mention the unclaimed amount and the number of such investors for each scheme.

Explanation:

Standing instructions like Systematic Investment Plans (SIP) are registered in a minor folio only till the date of the minor attaining majority, even though the instructions may be for an extended period.

When the minor is approaching the age of majority, AMCs usually send letters advising the guardian and the minor to submit the form along with prescribed documents to change the status of the account/folio to “major”.
All SIP, STP, SWP and any other standing instruction registered in the minor’s account are suspended if the documents are not received by the date when the minor attains majority.

Explanation:

Transmission is the process of transferring units to the person entitled to receive them in the event of the death of the unitholder. If the first holder passes away, the second holder is substituted as the first holder.

Explanation:

The application to SEBI for registration of a mutual fund is made by the sponsors.

Explanation:

Both taxes and loads reduce investment returns. Therefore, it is important for the distributor to consider these two aspects during repurchases/redemptions. This means that when there is a need to withdraw money from a scheme, the distributor must assess the implications of capital gains tax and exit loads.

Explanation:

Option 1 is wrong as Scheme Information Document (SID) and Statement of Additional Information (SAI) are primarily the two important documents.

Key Information Memorandum (KIM) is a summary of SID and SAI.

Explanation:

Persons aggrieved by an order of Adjudicating Officer passed under the SEBI Act can prefer an appeal to Securities Appellate Tribunal (SAT) under section 15T of the SEBI Act.

Explanation:

Nomination is only an authorization for the mutual fund to transfer the units to the nominee in the event of demise of the unit-holder. The nominee holds the units in trust for the legal heirs of the investor. It does not
create any title or beneficial interest in the units in favour of the nominee after the death of the unit-holder.

An investor in a mutual fund scheme is the beneficial owner of the units one has bought.

Explanation:

Overconfidence / Optimism bias refers to a person’s overconfidence in one’s abilities or judgment. This leads one to believe that one is far better than others at something, whereas the reality may be quite different. Under the spell of such a bias, one tends to lower the guards and take on risks without proper assessment.

Explanation:

Mutual funds are not permitted to promise any returns, unless it is an assured returns scheme. Assured returns schemes call for a guarantor who is named in the SID. The guarantor will need to write out a cheque, if the scheme is otherwise not able to pay the assured return.

Investor returns might vary from the scheme returns also on account of choices regarding investment schedule, i.e., additional investment being made during the period or redeeming a portion of the investment. In such a case, for the same period investor’s returns may be different from the published returns of the scheme.

The returns published in a mutual fund advertisement would be without factoring the entry or exit load, as may be applicable.

Explanation:

Securities markets in India are regulated by the Securities and Exchange Board of India (SEBI). It regulates, among other entities, mutual funds, depositories, custodians and registrars and transfer agents in the country.

(AMFI is neither a regulatory body nor a Self-Regulatory Organisation)

Explanation:

Units are allotted as per current NAV.

The NAV is Rs 50 and the amount invested is Rs 200,000

Units allotted = 200,000 / 50 = 4,000

(Currently there is no entry load)

Explanation:

A sector fund exclusively invests in the relevant sector; therefore, the benchmark should align with a similar index. For instance, a Banking Sector fund can be appropriately benchmarked against S&P BSE Bankex, and an Infrastructure Fund can be benchmarked against Nifty Infrastructure Index to obtain an accurate representation.

Explanation:

Once acquiring the ARN No., a distributor can become affiliated with numerous AMCs.

The appointment of a distributor by an AMC is grounded in the agreement established between the AMC and the distributor.

Explanation:

Applications for non-financial transactions, such as changing an address and investor acknowledgment, are stamped with both date and time. However, in this context, the stamping of time is not necessary; the focus is on date stamping.

Explanation:

The Scheme Information Document (SID) and Statement of Additional Information (SAI) provide comprehensive details about a specific mutual fund scheme and the statutory information related to the mutual fund or Asset Management Company (AMC) offering the scheme.

The Key Information Memorandum (KIM) serves as a condensed version of the SID and SAI. It highlights crucial information necessary for investors to make decisions regarding the suitability of the investment for their needs. The KIM is distributed more widely and easily in the market. According to SEBI regulations, every application form must be accompanied by the KIM.

Explanation:

Balanced Hybrid Fund: A balanced open-ended scheme that invests in both equity and debt instruments. The allocation to equity and equity-related instruments is set between 40 percent and 60 percent of total assets, with the investment in debt instruments ranging between 40 percent and 60 percent.

Explanation:

Explanation:

Art is not a commodity. It cannot be standardised. Its valued as per the perception of buyer etc.

Fibers (eg. – Cotton yarn), Spices (eg.- Turmeric) and Energy Products ( eg. – Oil) are all commodities.

Explanation:

The Registrars and Transfer Agents (RTAs) maintain investor records.

The functions of the RTA include processing of purchase and redemption transactions of the investor and dealing with the financial transactions of receiving funds for purchases and making payments for redemptions, dividends etc, updating the unit capital of the scheme to reflect these transactions, updating the information in the individual records of the investor, called folios, keeping the investor updated about the status of their investment account and information related to the investment.

Explanation:

Expenses for managing the fund are charged to the fund. Any expense other than investment advisory fee and recurring expenses shall be borne by the asset management company or trustee or sponsors.

Explanation:

As per SEBI rules – The mutual fund shall before the expiry of one month from the close of each half year, shall display the unaudited financial results on AMC website, the advertisement in this reference will be published by the fund in at least one English daily newspaper and one regional language newspaper.

Explanation:

Once units are pledged, the Unit-holder/s cannot sell or switch out the pledged units, until the pledgee gives a written no-objection to release the pledge.

Explanation:

Apart from providing information about the schemes in the fund fact sheet, AMCs may also provide periodic updates on markets and the economy. The factsheet is also used by the fund manager to communicate their views on the economy and the markets to the investors.

Explanation:

Shares and Debentures are not physical assets. They are financial assets.

Physical assets include Gold, Building, Art etc.

Explanation:

To assess the performance of a mutual fund scheme, it should be compared to a predefined benchmark. For example, a midcap fund can be benchmarked or compared against the Nifty Midcap 50 index.

Explanation:

A Scheme/Plan must include a minimum of 20 investors, and an individual investor is not allowed to contribute more than 25 percent to the corpus of the Scheme/Plan.

Explanation:

Explanation:

Typically, a notary public is unauthorized to attest documents for Know Your Customer (KYC) compliance if originals are not presented during the KYC process. A notary public’s role is to verify the authenticity of signatures on documents and, in some cases, the identity of the individuals signing them. However, when it comes to KYC procedures, financial institutions and other entities often require original documents as part of the verification process. Notaries are generally not authorized to verify identity solely based on copies of documents without the presence of the original documents. KYC processes aim to ensure the accuracy and legitimacy of information provided, and relying on original documents helps enhance the security and reliability of the verification process.

Explanation:

The Reserve Bank of India and its branches do not participate in the sales and distribution of mutual fund products.

Explanation:

While the SID, SAI and KIM need to be updated periodically, the interim changes are updated through the issuance of an Addendum. The addendum is considered to be a part of the scheme-related documents, and must accompany the KIM.