6.1 Mandatory Documents I: Scheme Information Document and Statement of Additional Information

NISM-Series-V-A: Mutual Fund Distributors Certification Examination Exam

Track your progress as you read

Finished sections get a check mark.

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

6.1 Mandatory Documents I: Scheme Information Document and Statement of Additional Information

Key Takeaways Explain This Topic AI

The SID is scheme-specific and the SAI is common to all schemes of the mutual fund.

The SID states the investment objective, asset allocation pattern, risk factors, benchmark, load structure and expenses.

The SAI carries statutory information about the sponsor, trustees, AMC, service providers, tax and legal matters.

Both must be updated within three months of the end of the financial year, with addenda issued for material interim changes.

The SAI is incorporated by reference into the SID, so the two together form the offer document.

Last updated: August 2026

Two Documents, One Offer

What used to be a single offer document is now split into two, because most of the content was identical across a fund house's schemes and repeating it was wasteful.

The Scheme Information Document (SID) carries everything specific to one scheme .

The Statement of Additional Information (SAI) carries the statutory and structural information common to the entire mutual fund .

The SAI is incorporated by reference into the SID , so the two together constitute the offer document. An investor who reads only the SID has still legally been given the SAI's contents.

Both are filed with SEBI before launch. SEBI does not approve the scheme's merits or certify the accuracy of its contents; it reviews for compliance with disclosure requirements. Every SID carries a statement to that effect, and a distributor who implies SEBI has vetted the investment is misrepresenting.

Contents of the Scheme Information Document

• Area What it discloses
• Investment objective What the scheme seeks to achieve, in a single stated sentence
• Asset allocation pattern Indicative and maximum ranges for each instrument type
• Where the scheme invests Permitted instruments, and any specific strategy or restrictions
• Risk factors Standard risk factors plus scheme-specific ones
• Risk-o-meter The scheme's risk level on the six-point scale
• Benchmark The index against which performance is measured, with the reason for choosing it
• Fund manager Name, experience and other schemes managed
• Load structure Exit load, and the fact that entry load is nil
• Expenses Recurring expense limits and actual expense ratio
• Plans and options Regular and direct plans; growth and IDCW options
• Minimum amounts For purchase, additional purchase, redemption and systematic transactions
• Past performance In the prescribed format where the scheme has a track record
• Investor rights and services Redressal, statements, dispatch timelines
• Penalties and litigation Pending matters against the sponsor, AMC or trustees

SEBI revised the SID format in 2024 to make it more usable: a defined table of contents, a section of key scheme highlights near the front, and standardised ordering across the industry, so that an investor comparing two schemes finds the same information in the same place.

The two entries a distributor should read first are the asset allocation pattern and the risk factors . The asset allocation table states the maximum equity a scheme may hold, which is what actually determines behaviour and tax treatment. A "conservative hybrid" permitted up to 25% equity behaves very differently from one permitted up to 10%.

Contents of the Statement of Additional Information

The SAI covers the fund rather than the scheme:

• Constitution of the mutual fund — the trust, the trust deed, the sponsor's contribution
• Sponsor — details and financial information
• Trustees — names, qualifications, responsibilities, and the trusteeship arrangement
• AMC — directors, key personnel, net worth, other business activities
• Service providers — custodian, RTA, auditors, bankers, fund accountant
• Condensed financial information for existing schemes
• How to apply — application procedure, modes of payment
• Rights of unitholders
• Tax, legal and general information — including the tax treatment of investments and distributions
• Investor grievance redressal history
• Associate transactions and dealings with group entities

Because the SAI carries tax information , a distributor answering a tax question should check the SAI rather than improvising — and should note that tax positions change with each Finance Act, so an SAI updated at year-end may itself lag a mid-year amendment.

Keeping the Documents Current

• Requirement Rule
• Regular update Both SID and SAI updated within three months of the end of the financial year
• Interim material change Communicated through an addendum , which forms part of the document
• Distribution of addenda Attached to the KIM and application form, and displayed on the AMC website

Fundamental attribute change Requires written notice to unitholders and an exit option at NAV without exit load for at least 30 days

That last row is heavily examined. A fundamental attribute is the scheme's type, its investment objective, or its terms including load structure. Changing one is not simply a disclosure event: unitholders must be notified in writing, the change advertised, and every unitholder given a window of at least 30 days to exit at the applicable NAV without any exit load . The reasoning is that an investor bought a specific proposition, and if that proposition changes they must be free to leave without penalty.

Where to Find Them

SID and SAI must be available on the AMC website and on the AMFI website , and provided to any investor who asks. The Key Information Memorandum — covered next — must physically accompany the application form, and it directs the investor to the full documents.