NISM Series XIX-E (Cat III AIF) study plan

Map the full AIF regulatory architecture - SEBI (AIF) Regulations 2012 as amended, the three-category scheme, and where Category III sits relative to I and II - into a one-page diagram you draw from memory

Distinguish Category III from Category I/II on at least six dimensions (investor base, leverage, derivatives use, valuation frequency, disclosure cadence, permissible structures) and write them as a comparison table

Trace the registration pathway for a Category III manager: eligibility of the sponsor/manager, fit-and-proper criteria, minimum corpus, minimum investor commitment, application route and timeline

List the constitutional forms permitted for Category III funds (trust, company, LLP, body corporate) and note which structural choices trigger additional compliance layers

Identify the key SEBI circulars and amendment history that changed Category III rules and note the direction of each change

Enumerate the ongoing compliance obligations of a Category III manager (reporting to SEBI, trustee/board oversight, investor reporting, audit, KYC/AML, grievance redressal) and assign a frequency to each

Explain the permitted leverage envelope for Category III funds - how leverage is defined, how it is measured, and the conditions under which derivatives exposure is counted

Describe how Category III funds may invest in derivatives and complex strategies, and articulate the risk-mitigation and disclosure conditions attached

Work through the mechanics of a Category III fund taking leveraged equity exposure, computing gross and net exposure from a hypothetical portfolio you construct

Draft the key clauses of a Category III private placement memorandum (PPM) - strategy, leverage policy, fees, redemption terms, risk factors

Compare the principal Category III strategy families - long-only with leverage, long-short equity, arbitrage, quant/systematic, event-driven, and multi-strategy - on return drivers, capacity, and risk profile

Analyse how short selling, derivatives overlays, and margin funding interact to create leverage in a long-short book

Identify the specific risks that complex trading strategies introduce (model risk, liquidity mismatch, crowding, counterparty and margin risk) and match each to a control

Explain the regulatory limits and prohibitions that constrain Category III strategy design, including any restrictions on unlisted or overseas exposure

Evaluate a hypothetical Category III fund's mandate and flag three strategy choices that would require additional disclosure or approval

Explain the valuation framework applicable to Category III funds - valuation frequency, independence of the valuer, treatment of illiquid and complex instruments, and the role of the manager versus an independent valuer

Build a risk-management framework for a Category III fund covering market, liquidity, counterparty, operational and model risk, with a named owner and escalation trigger for each

Describe the disclosure obligations to investors and to SEBI, including periodic reporting content and the treatment of material adverse events

Outline the investor-protection safeguards specific to Category III - investor qualification, consent, redemption gates, side-pocketing and conflict-of-interest management

Distinguish the manager's fiduciary duties from its commercial discretion when setting fees, gates and valuation inputs

Trace the fund accounting cycle for a Category III fund - NAV computation, accruals, expense allocation, equalisation and performance-fee crystallisation - and identify the points where errors most commonly arise

Explain the taxation framework relevant to Category III AIFs and their investors, including the pass-through position, treatment of business income versus capital gains, and the implications of frequent trading

Map the operational infrastructure a Category III manager needs - fund administrator, custodian, prime broker, auditor, compliance officer - and the control each provides

Apply the code of conduct and ethical standards expected of a Category III manager to three realistic conflict scenarios (soft-dollar arrangements, allocation of a hot IPO, personal trading by a fund manager)

Identify the record-keeping, audit-trail and reporting controls that support both compliance and tax positions

Revisit the weakest areas from weeks 1–5, re-deriving rather than re-reading, and close each gap with a written self-explanation

Reconcile the regulatory, valuation and tax rules into a single timeline of a fund's life cycle from launch to wind-down, noting the compliance and tax event at each stage

Practise applying rules to fact patterns: write five short case scenarios and answer each in exam-style format

Identify the numbers worth memorising (minimum corpus, minimum investor commitment, leverage limits, reporting frequencies) and build a single reference sheet

Self-assess against the domain weightings and decide where week 7 practice time should concentrate

Complete a full-length timed mock under exam conditions and record the score by domain

Analyse every incorrect answer to root cause - knowledge gap, misread question, or rule confusion - and categorise them

Re-study only the root-cause categories that account for the most lost marks

Do a second timed mock and compare domain-level scores against the first to confirm improvement

Rehearse the leverage, valuation and tax computations until you can complete each without reference notes

Consolidate the highest-weight and highest-error domains using spaced recall - rewrite key frameworks from memory and check against notes

Drill the distinctions most likely to be tested: Category III versus I/II, manager duties versus trustee duties, valuation versus disclosure obligations

Review the ethics and conduct material and rehearse the reasoning pattern for scenario questions

Run a final short mock focused only on previously missed questions and confirm each is now answered correctly with a stated reason

Finalise a one-page pre-exam sheet of numbers, definitions and decision rules to review on exam day