Mutual Funds

Importance of NISM Examinations

NISM (National Institute of Securities Markets) was established by SEBI (Securities and Exchange Board of India). This was pursuant to the announcement made by India’s Finance Minister during his budget speech on February 2005. The desire by the government of India to promote securities market research and education was articulated by SEBI when they decided to establish NISM.

NISM has commenced an effort to deliver securities and financial education across various segments and at different levels abroad and in India. Six distinct schools have been established by NISM with the hope of implementing its objectives of catering for educational needs of various constituencies such as future professionals of securities, academia, policy makers, regulatory staff, intermediaries, issuers and investor. With a view to ensure knowledge levels of securities’ industry participants are enhanced, various publications on securities markets have been brought out by NISM.

The same organization has been given the mandate to implement and develop certification exams for professionals who are employed in various sections of the Indian securities markets. These examinations will vary and certifications will be given to candidates who have successfully completed and passed an examination. The exams are 14 in total, with some segments having more than one exam. To have an understanding about these exams, it would be prudent to have some information on a few of them.

The first examination is referred to as NISM series I – currency derivatives certification examination. It is designed to create a common minimum knowledge benchmark for people who are working in the currency derivatives market section. It will enable a better understanding of exchange traded currency and currency markets derivatives products. It will also allow for a better understanding of risk controls, operational process and better quality investor service.

The fees for the examination will vary according to the citizenship of the candidate (resident or non-resident). The number of questions for this particular paper is 100. Each candidate will be given 120 minutes to sit for the paper and they are expected to have at least 60% in order to pass the examination. The certificate has a validity of 3 years after which the candidate will re-sit the exam in order to get re-certification and knowledge on any new techniques that may have been discovered.

NISM series V A – Examination for mutual fund distributors is another type of examination provided. It has been designed with the intent of creating a common minimum knowledge benchmark for any individual involved in distributing and selling mutual funds. They include employees of asset management companies especially people who are engaged in distribution and sales of mutual funds, employees of organizations engaged in distribution and sales of mutual funds and individual mutual fund distributors. The certification aims to improve the quality of distribution, sales and any other related support services found in the mutual fund industry.

The cost of the module will vary with citizenship. However, the test duration and number of questions are 120 and 100 minutes respectively. The pass mark is 50% with the maximum marks being 100 and the validity of the certificate being 3 years.

From this information, it is quite evident to see that the examinations all have 100 questions, 100 possible marks and 120 minutes as the duration of the examination. The cost and the pass mark for each will vary. This means that any individual who has one or more certifications from NISM will be considered highly qualified in their field of expertise. As a result, finding employment or contracts will be easier for them.

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