Study guide
10.4 Allotment of Units and Account Statements
NISM-Series-V-A: Mutual Fund Distributors Certification Examination Exam
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1 Chapter 1: Introduction & Exam Overview
1.1 About the NISM-Series-V-A Examination 1.2 The 12-Unit Curriculum Map and a Study Plan
2 Chapter 2: Investment Landscape
2.1 Investors and Their Financial Goals 2.2 Savings or Investments? 2.3 Different Asset Classes 2.4 Investment Risks 2.5 Risk Measures and Management Strategies 2.6 Behavioural Biases in Investment Decision Making 2.7 Risk Profiling 2.8 Asset Allocation and Do-It-Yourself versus Professional Help
3 Chapter 3: Concept and Role of a Mutual Fund
3.1 Concept of a Mutual Fund 3.2 Classification of Mutual Funds 3.3 Growth of the Mutual Fund Industry in India
4 Chapter 4: Legal Structure of Mutual Funds in India
4.1 Structure of Mutual Funds in India 4.2 Key Constituents of a Mutual Fund 4.3 AMC Organisation Structure and Service Providers 4.4 Role and Function of AMFI
5 Chapter 5: Legal and Regulatory Framework
5.1 Role of Regulators in India 5.2 Role of SEBI and the Mutual Fund Regulations 5.3 Due Diligence Process by AMCs for Distributors 5.4 Investor Grievance Redress Mechanism 5.5 AMFI Code of Conduct for Intermediaries
6 Chapter 6: Scheme Related Information
6.1 Mandatory Documents I: Scheme Information Document and Statement of Additional Information 6.2 Mandatory Documents II: Key Information Memorandum and the Advertisement Code 6.3 Non-Mandatory Disclosures
7 Chapter 7: Fund Distribution and Channel Management Practices
7.1 The Role and Importance of Mutual Fund Distributors 7.2 Different Kinds of Mutual Fund Distributors 7.3 Modes of Distribution 7.4 Pre-requisites to Become a Distributor of a Mutual Fund 7.5 Revenue for a Mutual Fund Distributor 7.6 Commission Disclosure Mandated by SEBI 7.7 Distributors versus Investment Advisers, Nomination Facilities and Change of Distributor
8 Chapter 8: Net Asset Value, Total Expense Ratio and Pricing of Units
8.1 Fair Valuation Principles 8.2 Computation of Net Assets of a Scheme and NAV 8.3 Dividends and Distributable Reserves 8.4 Entry and Exit Load and Its Impact on NAV 8.5 The Expense Ratio Framework: Base Expense Ratio, Brokerage and Statutory Levies 8.6 Key Accounting and Reporting Requirements 8.7 NAV, Total Expense Ratio and Pricing of Units for the Segregated Portfolio
9 Chapter 9: Taxation
9.1 Applicability of Taxes in Respect of Mutual Funds 9.2 Capital Gains on Mutual Fund Units 9.3 Dividend (IDCW) Income and Tax Deducted at Source 9.4 Stamp Duty and Securities Transaction Tax on Mutual Fund Units 9.5 Setting Off Capital Gains and Losses under the Income Tax Act 9.6 Tax Benefit under Section 80C and Applicability of GST
10 Chapter 10: Investor Services
10.1 The New Fund Offer Process 10.2 New Fund Offer Price and Ongoing Offer Price for Subscription 10.3 Investment Plans and Services 10.4 Allotment of Units and Account Statements 10.5 Mutual Fund Investors: Who Can Invest 10.6 Filling the Application Form for Mutual Funds 10.7 Financial Transactions with Mutual Funds 10.8 Cut-Off Time and Time Stamping 10.9 KYC Requirements for Mutual Fund Investors 10.10 Systematic Transactions and Their Operational Aspects 10.11 Non-Financial Transactions, Special Investor Categories and Turnaround Times
11 Chapter 11: Risk, Return and Performance of Funds
11.1 General and Specific Risk Factors 11.2 Factors That Affect Mutual Fund Performance 11.3 Drivers of Returns and Risk in a Scheme 11.4 Measures of Returns 11.5 SEBI Norms Regarding Representation of Returns 11.6 Risks in Fund Investing: The Investor's Perspective 11.7 Measures of Risk and Provisions Relating to Credit Risk
12 Chapter 12: Mutual Fund Scheme Performance
12.1 Benchmarks and Performance 12.2 Price Return Index or Total Return Index 12.3 Basis of Choosing an Appropriate Performance Benchmark 12.4 Benchmarks for Equity Schemes 12.5 Benchmarks for Debt Schemes and Other Schemes 12.6 Quantitative Measures of Fund Manager Performance 12.7 Tracking Error and Scheme Performance Disclosure
13 Chapter 13: Mutual Fund Scheme Selection
13.1 Scheme Selection Based on Investor Needs, Preference and Risk Profile 13.2 Risk Levels in Mutual Fund Schemes 13.3 Scheme Selection Based on Investment Strategy 13.4 Selecting a Scheme Across AMCs or Within a Scheme Category 13.5 Selecting Options in Mutual Fund Schemes and Do's and Don'ts
10.4 Allotment of Units and Account Statements
Key Takeaways Explain This Topic AI
Units are allotted at the applicable NAV once funds are realised and available for utilisation.
Units are allotted up to three or four decimal places, so investors hold fractional units.
An allotment confirmation must be sent by email or SMS within five business days.
Redemption proceeds must be paid within three working days, and IDCW within seven working days of the record date.
Delay in paying redemption proceeds or distributions attracts penal interest at 15% per annum.
Last updated: August 2026
Allotment
Units are allotted once two conditions are satisfied:
- The application is received at an Official Point of Acceptance within the applicable cut-off time, and
- The funds are realised and available for utilisation by the scheme
The applicable NAV then determines how many units are issued. Units allotted = (Amount invested - stamp duty) / Applicable NAV
- Worked example. INR 75,000 invested, applicable NAV INR 62.4820. Stamp duty = 0.005% of 75,000 = INR 3.75
- Net investible = 75,000 - 3.75 = INR 74,996.25
- Units allotted = 74,996.25 / 62.4820 = 1,200.29 units
Units are allotted in fractions , generally up to three or four decimal places. This is what allows a fixed rupee amount to be invested exactly, and is why a SIP of INR 5,000 buys a different fractional quantity each month. Investors sometimes ask to be allotted whole units; that is not how the arrangement works, because the investment is denominated in rupees rather than in units.
Confirmation of Allotment
- Communication Timeline
- Allotment confirmation by email or SMS Within 5 business days of the transaction
- Account statement on request On request at any time
- Monthly Consolidated Account Statement To investors who transacted during the month
- Half-yearly Consolidated Account Statement Half-yearly, covering all folios
The allotment confirmation states the units allotted, the NAV applied, the amount invested and the folio number. Investors should check the NAV applied against the date they expected — a mismatch usually means the funds were realised on a later day, and that is the point at which a query is worth raising.
Account Statements
The Consolidated Account Statement (CAS) consolidates across all mutual funds linked to the investor's PAN , not just one fund house.
A monthly CAS is issued to investors who transacted during that month.
A half-yearly CAS covers all folios and carries the disclosures of actual commission paid to the distributor in rupees and the expense ratios of both plans.
Where units are held in dematerialised form, the CAS is issued by the depository and covers other securities alongside mutual fund units.
Investors who have not provided a PAN receive folio-level account statements from each AMC instead of a consolidated statement.
Payment Timelines
These are precise, recently tightened, and heavily examined.
- Payment Timeline Measured from
- Redemption or repurchase proceeds 3 working days Date of redemption or repurchase
Redemption proceeds, schemes with at least 80% in overseas instruments 5 working days Date of redemption or repurchase
- IDCW payment 7 working days The record date
- Penal interest for delay 15% per annum For the period of delay, paid with the proceeds
These replaced far more generous earlier timelines — redemption proceeds previously took up to ten working days and distributions up to thirty days without penalty. The penal interest obligation is what gives the current timelines force: an AMC that pays late must compensate the investor at 15% per annum for the delay, automatically and without the investor having to ask.
A distributor should know these numbers because "where is my money?" is among the most common investor queries, and the answer depends on whether the timeline has actually been breached.
Payment Mechanics
Proceeds are credited electronically to the registered bank account of the first unitholder.
The bank account must be registered in the folio , and a bank change request has its own processing time and verification.
Payment to a third party account is not permitted ; proceeds go only to the unitholder.
Where bank details are incorrect or the mandate has failed, the credit is rejected and reissued after correction, which is the commonest cause of an apparent delay.
A great many "delayed redemption" complaints turn out to be stale bank details in the folio. A distributor who ensures bank mandates are current prevents the problem rather than chasing it.
Freezing and Restrictions
Allotment and redemption may be restricted where:
- KYC status is on hold or incomplete
- A lien or pledge is marked on the units
- The folio is frozen pending documentation, for example where a minor has attained majority
- Statutory or regulatory attachment applies
In each case the restriction is on the folio rather than on the scheme, and it is resolved by completing the documentation the RTA requires.
Reading a Consolidated Account Statement Properly
The half-yearly CAS is the most under-used document an investor receives, because two of its disclosures exist specifically to inform them about the distributor.
Commission paid in rupees. The actual amount the AMC paid the distributor on that investor's holdings, scheme by scheme, in rupees rather than as a percentage. It is not an estimate and it is not optional.
Expense ratio of both plans. The regular plan's ratio and the direct plan's ratio side by side, so the cost of advice is visible as a number.
A distributor who walks an investor through these two lines before the investor finds them independently converts a potentially awkward discovery into a demonstration of transparency. The disclosure is going to arrive either way; the only variable is who explains it.
The CAS also shows, for every folio, the units held, the current value, the transactions of the period and the nominee details on record — which makes it the simplest annual prompt to check that nomination is still current after a marriage, a birth or a bereavement.
When No Statement Arrives
If an investor reports receiving nothing, the cause is almost always one of four things, in this order of frequency: the email address on the folio is stale, the PAN is not linked so a consolidated statement cannot be generated, the folio saw no transaction in a month for which only the monthly CAS was due, or the units are held in demat so the statement comes from the depository instead. Checking those four resolves the query without a complaint.