In a major relief for distributors, the National Institute of Securities Markets (NISM) has now introduced a common certification examination for distributors of both mutual funds and Specialised Investment Funds (SIFs), potentially making it easier for large mutual fund distribution networks to venture into the emerging SIF category.
The NISM-Series-V-D: Mutual Fund–Specialized Investment Fund Distributors Certification Examination will be available from July 22. It has been designated as the requisite certification standard for individuals involved in the sale and distribution of both mutual funds and SIFs. Earlier, distributors were finding it difficult to clear the SIF exam as it was much complicated.
The development comes even as SIF assets have been growing rapidly with industry AUM increasing 29 per cent month-on-month to ₹17,858 crore in June, while monthly inflow rose 171 per cent to ₹3,782 crore. Hybrid investment strategies accounted for nearly 72 per cent of total SIF assets. In June, the industry added 717 SIF distributors, taking the total count to nearly 7,000.
Unified examination
Mutual fund distributors looking to distribute SIFs were required to establish competency across both mutual funds and derivatives. The new examination consolidates these subjects into a single certification. Distributors who have already cleared both the NISM-Series-V-A Mutual Fund Distributors examination and the NISM-Series-XIII Common Derivatives examination will not need to take the new test.
The examination retains a substantial derivatives component, reflecting the more complex strategies used by SIFs. Mutual funds account for 45 per cent of the syllabus, equity derivatives for 35 per cent, and interest-rate derivatives for 20 per cent. The three-hour examination has 150 questions, a 60 per cent passing requirement and a registration fee of ₹3,000 plus taxes.
Aditya Agarwal, Co-founder of Wealthy.in, a wealth-management platform said the simplified certification lowers entry barriers, reduces compliance complexity and encourages more individuals to join the industry, particularly as mutual fund penetration continues to expand across India.
The revised NISM certification framework addresses many of the practical concerns associated with the earlier examination format, particularly the need for multiple certifications, duplication of syllabus and higher compliance burden for distributors seeking to expand their product offerings, he said.
However, the reform primarily addresses procedural and operational challenges rather than the broader issues facing the distribution industry.
Key challenges
Challenges such as increasing financial literacy, building investor trust, expanding penetration in smaller cities, adapting to evolving regulations and providing quality investment advice still require continuous learning and practical experience, said Agarwal.
In that sense, the simplified examination improves accessibility but does not replace the need for strong domain knowledge and ethical, client-centric advisory practices, said a MF distributor.
While the simplified NISM certification will improve distributor interest and accelerate market readiness, the pace of SIF growth will ultimately depend less on certification and more on investor awareness, product suitability, distributor economics and the ability of fund houses to demonstrate consistent outcomes, he added.