Mutual Fund Distributors Free Demo Test 2

Explanation:

SEBI guidelines stipulate those dividends can be paid out of distributable reserves. In the calculation of distributable reserves:

– All the profits earned (based on the accrual of income and expenses as detailed above) are treated as available for distribution.
– Valuation gains are ignored. But valuation losses need to be adjusted against the profits.
– That portion of the sale price on new units, which is attributable to valuation gains, is not available as a distributable reserve.

Explanation

Floater Fund in an open-ended debt scheme predominantly investing in floating rate instruments (including fixed rate instruments converted to floating rate exposures using swaps/derivatives). Minimum investment in floating-rate instruments (including fixed-rate instruments converted to floating-rate exposures using swaps/derivatives) shall be 65 percent of total assets.

Explanation

Vide SEBI circular dated September 17, 2020, it was decided that with respect to the 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. Until now, investors who gave a cheque for below Rs 2,00,000 got the same day’s NAV, while those putting in more got the NAV of the day when the cheque was realized.

Explanation

SEBI has mandated AMCs to put in place a due diligence process to regulate distributors concerning ‘Business model, experience and proficiency in the business’ who qualify any one of the following criteria:
a. Multiple point presence (More than 20 locations)
b. AUM raised over Rs. 100 crore across the industry in the non-institutional category but including high net worth 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

A credible benchmark should meet the following requirements: It should be in sync with (a) the investment objective of the scheme; (b) the asset allocation pattern; and (c) the investment strategy of the scheme.

Explanation

Transaction charges do not apply to transactions other than purchases/subscriptions that result in fresh inflows. Transactions like switches, systematic transfers, dividend transfers, and dividend re investment are not eligible for transaction charges.

Explanation

The lock-in period for an ELSS fund is 3 years from the date of allotment of each unit. So even for an SIP investment, each SIP will have a lock-in for 3 years.

Explanation

A Consolidated Account Statement (CAS) for each calendar month is sent by post/email on or before the 10th of the succeeding month provided there has been a financial transaction in the folio in the previous month.

Explanation

Multi-cap funds spread the investments across the market capitalization spectrum to try and benefit from the opportunities across the market. They invest in a mix of large, mid, and small market capitalization stocks.

Explanation

For mutual fund distributors having multiple points of presence (More than 20 locations), mutual funds / AMCs need to disclose the total commission and expenses paid to distributors, disclosures regarding distributor-wise gross inflows (indicating whether the distributor is an associate or group company of the sponsor(s) of the mutual fund), net inflows, average assets under management and ratio of AUM to gross inflows on their respective website every year.