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NISM Series III-C study materials
NISM Series III-C study resources

NISM Series III-C: Securities Intermediaries Compliance (Fund)

NISM Series III-C · Work through your exam, one topic at a time.

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Securities Intermediaries Compliance (Fund)

Domain overview

This domain tests the compliance framework that securities intermediaries in the fund ecosystem-asset management companies (AMCs), mutual funds, portfolio managers, and alternative investment funds (AIFs)-must operate. The exam checks whether you can map a fact pattern to the right SEBI regulation, identify the compliance officer’s reporting line, and distinguish a regulatory breach from an operational error.

Core rules

  • The AMC appoints a compliance officer who is independent of fund management, sales, and valuation; the officer reports to the AMC board and supports trustee oversight. The trustee, not the compliance officer, is the primary guardian of unitholders’ interests.
  • Compliance covers SEBI (Mutual Funds) Regulations, 1996, SEBI (Portfolio Managers) Regulations, 2020, SEBI (Alternative Investment Funds) Regulations, 2012, insider-trading rules, KYC/AML, advertisement code, valuation, and grievance redressal.
  • Filings and certifications must be timely and accurate; a compliance certificate is placed before the AMC board, and material breaches are escalated to trustees and SEBI.
  • Third-party distributors and registrars need documented due diligence; commissions and fees must follow the regulatory ceiling and disclosure rules.

Worked example

An AMC advertisement for a debt scheme states “capital protection with assured 9% return.” The compliance officer must reject the draft before release: assured returns are not permitted in mutual fund advertising, and “capital protection” is misleading unless legally secured. The officer records the decision, requires corrected risk disclosures, and reports the near-miss to the AMC board. If the ad had already run, the officer would arrange withdrawal, investor communication, and a board report-not merely a verbal warning to sales.

Traps

  • Assuming the compliance officer can also head sales or fund management.
  • Treating trustee approval as optional after a breach.
  • Missing that distributor due diligence and AML alerts are compliance duties, not back-office chores.
  • Confusing “complaint logged” with “complaint resolved” under grievance-redressal timelines.