NISM Series II-B (RTA Mutual Fund) cheat sheet

NAV = (Total Assets − Total Liabilities) ÷ Number of Units Outstanding; computed at the close of each business day and rounded to two decimal places (four for debt schemes of certain categories as prescribed).

RTA core functions: investor record maintenance, transaction processing, KYC verification, unit allotment, dividend/redemption payout coordination, statement issuance, and grievance handling on behalf of the AMC.

Unit allotment is made only after realisation and reconciliation of funds; for physical applications the cut-off is 3:00 p.m. on business days at the official point of acceptance (OPAT).

Redemption proceeds must be dispatched within 3 working days of the redemption request (10 working days for schemes with unlisted or illiquid securities, subject to regulatory carve-outs).

Unclaimed amounts: dividends and redemptions outstanding for 90 days are moved to the AMC's Unclaimed Dividend/Redemption account; amounts unclaimed for 3 years are transferred to the Investor Education and Protection Fund (IEPF).

Folio numbering is unique per AMC–RTA relationship; a single folio can hold multiple schemes, and units are held in a dematerialised form through NSDL/CDSL via a demat account linked to the investor.

Common Account Statement (CAS) is issued by the RTA on behalf of the AMC to each unitholder at least once a year, covering all folios across AMCs for which the RTA acts, and is sent by email or post.

Reconciliation: RTA reconciles units and bank balances with the AMC/registrar daily; any variance must be investigated and reported, and NAV errors above the prescribed threshold trigger repricing and compensation.

Cut-off time for purchase/redemption is 3:00 p.m. on business days at the OPAT; applications received after cut-off are processed at the next business day's NAV.

Same-day NAV is available for applications received before cut-off only if the funds are realised and available to the AMC before the cut-off; otherwise the NAV of the day funds are realised applies.

For purchases of ₹2 lakh or more (including switch-in), the NAV of the day the funds are credited to the AMC's account applies, not the application date.

Cheque/DD/EFT payments: the NAV of the day funds are realised applies if the application is received before cut-off; for amounts below ₹2 lakh, the NAV of the application day applies if funds are received on the same day.

Redemption request must state the amount or units; partial redemption in units leaves the folio with the remaining units; full redemption closes the folio.

Switch transactions are treated as a redemption from one scheme and a purchase into another; both legs may attract different NAVs and exit loads.

Systematic Investment Plan (SIP), Systematic Transfer Plan (STP) and Systematic Withdrawal Plan (SWP) are processed on the registered date; if that date is a non-business day, the next business day is used.

Exit load is charged on redemption/switch-out as a percentage of NAV and is credited to the scheme's pool; it is not a charge to the AMC.

KYC is mandatory for all unitholders; PAN is the primary identifier, and the KYC status must be verified against the CKYC/SEBI-designated KRA before allotment.

For an individual, KYC documents typically include PAN, proof of identity/address, photograph and a self-attested KYC form; for non-individuals, constitution documents, board resolution and authorised signatory list are required.

A minor's folio is opened in the minor's name with the guardian as the authorised signatory; on attaining majority, the minor must complete fresh KYC and submit a new bank mandate.

Change of bank mandate, address, nominee or signature requires a written request with supporting proof and the folio's authorised signatory signature; the RTA verifies against the recorded signature.

Nomination is optional for individual folios; where no nominee is registered, units are transmitted to legal heirs on submission of succession documents.

Transmission of units on death requires a death certificate, KYC of the claimant, and (where applicable) a succession certificate, probate or letter of administration.

Unitholder statements: transaction confirmation within 5 working days of the transaction; annual CAS at least once a year; a duplicate statement can be requested at the RTA's prescribed fee.

Redressal of investor complaints follows a defined escalation: RTA/AMC grievance cell, then SEBI's SCORES platform, and finally the online dispute resolution mechanism.

RTAs are registered with SEBI under the SEBI (Registrars to an Issue and Share Transfer Agents) Regulations, 1993, and must maintain net worth and code of conduct obligations.

Mutual funds are governed by the SEBI (Mutual Funds) Regulations, 1996, which prescribe scheme categorisation, asset allocation, investment limits, and disclosure requirements.

AMC must maintain a minimum net worth of ₹50 crore, and the sponsor must contribute at least 40% of the AMC's net worth; the AMC must be a separate legal entity.

The trustee must be independent of the AMC and hold at least two-thirds independent trustees; trustees oversee the AMC's operations and safeguard unitholder interests.

SEBI circulars and AMFI best-practice guidelines supplement the regulations; the AMFI Code of Conduct and the standard scheme information document (SID) are mandatory reference documents.

RTAs must comply with SEBI's cybersecurity and cyber-resilience framework, including a documented incident-response plan and periodic audits.

Anti-money laundering obligations arise under the PMLA, 2002 and SEBI AML guidelines; the RTA must maintain records and report suspicious transactions to FIU-IND.

RTAs must preserve records and documents for the period prescribed by SEBI (currently at least 8 years) and make them available to SEBI on demand.

Key operational risks: NAV calculation errors, misallocation of units, delayed payouts, data leakage and fraud; each must be mapped to a control and a responsible owner.

NAV error policy: errors above the SEBI-prescribed threshold (0.5% for equity and 0.1% for debt schemes, subject to current circulars) require repricing, notification and compensation to affected unitholders.

Segregation of duties: transaction processing, cash reconciliation and NAV verification should be performed by different personnel to reduce fraud risk.

Business continuity and disaster recovery: the RTA must maintain a documented BCP with an alternate site, periodic testing, and recovery-time objectives for critical systems.

Complaint handling: each complaint must be logged, acknowledged within 3 working days and resolved within the SEBI-prescribed timeline; unresolved complaints escalate to SEBI SCORES.

SCORES (SEBI Complaints Redressal System) is the online platform for investor complaints; the RTA/AMC must respond within the prescribed action-taken timeline.

Internal audit and compliance: periodic audits of RTA operations, KYC records and payout processes are mandatory; findings must be reported to the AMC and trustees.

Investor protection: the AMC must maintain an Investor Education Fund and disclose grievance-redressal data in its annual report and on its website.