10.6 Filling the Application Form for Mutual Funds

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

10.6 Filling the Application Form for Mutual Funds

Key Takeaways Explain This Topic AI

The application form must be accompanied by the Key Information Memorandum and current addenda.

PAN and KYC compliance are mandatory for every holder before units can be allotted.

The distributor's ARN and, where advice was given, the individual's EUIN must be recorded.

Leaving the EUIN blank requires the investor to sign the execution-only declaration.

Third-party payments are not permitted except in narrowly defined circumstances.

Last updated: August 2026

What Must Accompany the Form

The Key Information Memorandum , together with any addenda issued since its last update, must accompany every application form. This is a hard requirement rather than good practice.

Sections of the Form
Distributor information

Field Content
ARN The distributor's AMFI Registration Number
Sub-broker ARN / code Where applicable
EUIN The employee or agent who gave the advice
Execution-only declaration Signed where the EUIN box is left blank

The EUIN rule is examined repeatedly. Where an individual has advised the investor, the EUIN must be recorded. Where no advice was given, the box is left blank and the investor signs the declaration that the transaction is execution only. Entering an arbitrary EUIN to complete the form falsifies the record and exposes the named individual to responsibility for advice they did not give.

Leaving the ARN blank makes the transaction a direct plan transaction.

Existing folio or new application

An existing investor quotes the folio number, and the personal details already on record apply. A new applicant completes the full details section.

Applicant details
Name exactly as in PAN records — mismatches are the single largest cause of rejection
PAN , mandatory for every holder
KYC acknowledgement
Date of birth, and for a minor, proof of date of birth and guardian details
Status: resident individual, NRI, HUF, company, trust and so on
Occupation and gross annual income, required under anti-money-laundering rules
Contact details, including mobile number and email
FATCA and CRS declaration of tax residency
Ultimate Beneficial Owner declaration for non-individual applicants
Bank details

Mandatory, and the source of most operational trouble later:

Account number, bank and branch, and IFSC
Account type
A cancelled cheque or bank verification document
Multiple bank accounts may be registered, with one designated as default

Redemption proceeds are credited only to a registered account of the unitholder . Payment to a third party is not permitted.

Scheme, plan and option
Scheme name, exactly as stated
Plan : regular or direct — determined by whether an ARN is quoted
Option : growth or IDCW, and for IDCW the sub-option of payout, reinvestment or transfer

A blank option field results in the default option stated in the scheme documents being applied, which is frequently not what the investor intended.

Payment details
Mode: cheque, demand draft, NEFT, RTGS, UPI or NACH mandate
Cheque number, bank and account, which must correspond to a registered account

Cash is accepted only up to the small prescribed limit and subject to conditions; in practice almost all investment is non-cash

Third-party payments are not permitted , with narrow exceptions such as payment by a parent or grandparent for a minor within a prescribed limit, an employer on behalf of an employee under a payroll deduction arrangement, and a custodian on behalf of an FPI. Each exception requires a third-party payment declaration and the relevant KYC.

Nomination

Up to ten nominees may be registered, with the percentage share to each. An investor who does not wish to nominate must sign a declaration opting out . Nomination cannot be made by a power of attorney holder on the investor's behalf.

Signatures

Every holder must sign as recorded in the folio, and the guardian signs on a minor's folio.

Common Causes of Rejection

Error Consequence
Name not matching PAN records Rejected
PAN missing or KYC on hold Cannot be processed
Bank details incomplete or IFSC wrong Delayed; payout fails later
Cheque from an unregistered third-party account Rejected
EUIN blank with no execution-only declaration Deficient
Option not selected Default option applied
Signature mismatch on a joint folio Rejected
KIM not provided with the form Non-compliant
The Distributor's Discipline

Three rules that prevent nearly all of the above:

Never submit a form signed in blank. It is an express breach of the AMFI Code of Conduct and removes the investor's informed consent.

Check the name against the PAN card , not against how the investor writes it.

Verify the bank details against the cancelled cheque , because a wrong IFSC surfaces only at redemption, when the investor most wants the money.

A form checked properly at submission costs a few minutes. A form rejected a week later costs the investor the intervening NAV movement and costs the distributor the relationship.

Mode of Holding

A folio with more than one holder must state how it is held, and the choice governs who has to sign for everything afterwards.

Mode Who must sign to transact On death of a holder
Single The sole holder Units pass to the nominee or legal heirs
Joint All holders, without exception Survivors continue, with documentation
Anyone or Survivor Any one holder Surviving holders continue to operate the folio

Anyone or Survivor is the mode most households actually want and the one least often selected, because the default tick is passed over. A joint folio held in Joint mode requires every holder's signature on a redemption, which becomes an obstacle precisely when a family needs money quickly. Correcting the mode later requires a written request signed by all holders, so it is far easier to get right at the outset.

Regardless of mode, all holders' PAN and KYC are required, and payouts go to a bank account registered in the folio.

Minor Folios

A folio for a minor is operated by a guardian — a natural guardian or a court-appointed one — and carries rules that surface years later:

The minor is the sole holder ; there can be no joint holder on a minor's folio.

Proof of date of birth and evidence of the guardian relationship are required at the outset.

Nomination is not permitted in a minor's folio.

Payment must come from the minor's own account , or from an account of the guardian or of a parent or grandparent within the third-party payment exception.

On attaining majority the folio is frozen for further transactions until the former minor submits fresh documentation in their own name — signature attestation, PAN, KYC and bank details.

The last point is where families are caught out. The AMC issues advance intimation before the eighteenth birthday, and a distributor who acts on it keeps an education-goal folio transactable at the moment it is needed.