Study guide
4.3 AMC Organisation Structure and Service Providers
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
4.3 AMC Organisation Structure and Service Providers
Key Takeaways Explain This Topic AI
The chief investment officer heads fund management, with fund managers, analysts and dealers reporting into the investment function.
Dealing is separated from fund management so that order execution can be independently evaluated.
The compliance officer reports to the trustees and the board, not solely to business management.
Risk management is an independent function that monitors exposure limits and liquidity.
Credit rating agencies, valuation agencies, payment aggregators and KYC registration agencies support the fund's operations.
Last updated: August 2026
How an AMC Is Organised
An asset management company is structured so that the functions capable of harming unitholders are supervised by people who do not report to the person doing them.
The Investment Function
Chief Investment Officer (CIO) — heads investment management and sets the overall investment approach and process.
Fund managers — responsible for specific schemes, making buy and sell decisions inside the mandate stated in the Scheme Information Document. Separate managers usually handle equity and fixed income, since the skills differ.
Research analysts — cover sectors and companies for equity, and issuers and macro conditions for debt, generating the ideas fund managers act on.
Dealers — execute the orders the fund managers decide upon.
Dealing is deliberately separated from fund management. The fund manager decides what and how much ; the dealer decides how to execute and with whom . Separation allows execution quality and broker allocation to be reviewed independently, and prevents a manager from directing business to a favoured broker.
Control Functions
Compliance officer — monitors adherence to SEBI regulations, the trust deed and the scheme documents. Reports to the board and the trustees , which is the point: a compliance officer reporting only to the business head cannot restrain the business head.
Risk management — an independent function monitoring exposure limits, concentration, liquidity and stress scenarios. It has authority to escalate breaches irrespective of investment views.
Internal audit — periodic independent review of processes and controls.
Operations and Support
Fund accounting — NAV computation, segregated from fund management.
Operations — trade settlement coordination with the custodian, reconciliation, corporate actions.
Sales and distribution — empanelling and servicing distributors, and direct investor acquisition.
Investor relations and service — grievance handling, coordination with the RTA.
Marketing — with all communications subject to SEBI's advertising code.
- The Structure in Outline Board of the AMC (>= 50% independent)
- |
- Chief Executive Officer
- +-----------------+-----+------+---------------+
- | | | |
- CIO Compliance Risk Operations
- | Officer * Management |
- Fund managers Fund accounting
- Research analysts RTA coordination
- Dealers (separated) Investor service
- * Compliance also reports independently to the Trustees
- Service Providers Around the Fund
Beyond the constituents in the previous section, a mutual fund depends on a wider ecosystem.
Credit rating agencies — SEBI-registered agencies such as CRISIL, ICRA, CARE and India Ratings assess the credit quality of debt instruments. Ratings feed directly into what a debt scheme may hold, since several categories carry rating-linked investment restrictions, and a downgrade has immediate consequences for valuation and sometimes for continued eligibility.
Valuation agencies — for debt and money market securities, which trade infrequently, valuation cannot rely on market prices alone. AMFI-appointed independent valuation agencies provide daily security-level valuations used by all funds, so that identical securities are not valued differently across AMCs. This is the practical mechanism behind fair valuation.
KYC Registration Agencies (KRAs) — SEBI-registered entities that hold and share investor KYC records across intermediaries, so an investor completing KYC once can transact across the securities market. The Central KYC Records Registry (CKYCR) operates a parallel repository across the wider financial sector.
Depositories — NSDL and CDSL hold dematerialised units and securities and support exchange-based transactions in mutual fund units.
Stock exchange platforms — BSE StAR MF and NSE MFSS allow distributors and brokers to place mutual fund transactions through exchange infrastructure.
Payment infrastructure — banks, payment aggregators, the National Automated Clearing House mandate system that powers systematic investment plans, and UPI-based collection.
Proxy advisory and stewardship — AMCs must vote on investee company resolutions and disclose their voting along with rationale, so proxy advisory research supports the stewardship obligation.
Why This Matters for a Distributor
A distributor rarely deals with a valuation agency. The reason the syllabus includes this material is that when an investor asks why a debt scheme's NAV moved on a day when nothing traded, or how the same bond is valued identically across two fund houses, the answer lies in this infrastructure. A distributor who can explain that independent agencies value debt securities daily for the whole industry gives an answer that is both true and reassuring — which is a better outcome than an improvised one.
Governance Inside the AMC
The organisation chart only works if it is anchored in governance requirements that sit above it.
Board composition. At least half of the AMC's directors must be independent — persons not associated with the sponsor or its associates in any manner.
Reporting to trustees. The AMC reports to the trustees on compliance, and the trustees in turn report periodically to SEBI. The compliance officer's independent line to the trustees is what makes that reporting meaningful rather than self-certified.
Approval of key appointments. Trustees have a say in the appointment of key personnel and in the AMC's compliance arrangements, which is why the AMC cannot simply reorganise a control function out of existence.
Restriction on other business. An AMC may undertake permitted activities such as portfolio management or advisory services only subject to SEBI's conditions, with adequate segregation of resources and no conflict with the interests of unitholders, and an AMC cannot act as trustee of any mutual fund .
Capital Behind the AMC
Governance is backed by capital. Under the SEBI (Mutual Funds) Regulations, 2026 , sponsorship is available by two routes: a track-record route , resting on experience in financial services and a record of profitability, and a capital-strength route , which opens sponsorship to entities without a long fund-management history provided the capital and experienced-personnel conditions are met. On the track-record route the AMC is required to carry a net worth of INR 50 crore , which may step down to about INR 25 crore once the AMC has been profitable for five continuous years. The MF Lite framework for passive-only fund houses carries lighter capital requirements, on the reasoning that running an index fund involves materially less discretion than running an active one.
For a distributor the relevance is narrow but real: these are the requirements that stand behind the statement that a mutual fund is a regulated vehicle, and they are the honest answer to an investor who asks what stops an AMC from simply disappearing with the money.