Ch.9 · Investor Services

KYC and Folio Management

40 practice questions on this topic

Which of the following is required for transmission of mutual fund units to a registered nominee where the claim value exceeds ₹5 lakh?

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EXPLANATION

For larger transmission amounts (above ₹5 lakh threshold which varies by AMC), AMCs require additional documentation — typically death certificate, nominee KYC, indemnity bond, and a notarised document evidencing the relationship or legal succession.

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What is the minimum KYC requirement for a minor investor's mutual fund folio?

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EXPLANATION

For a minor's folio, the guardian must complete KYC. The folio requires the minor's date of birth proof (birth certificate, school certificate, etc.) and the relationship proof between the minor and guardian. The minor's own KYC is completed on attaining majority.

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Which of the following is an advantage of using an STP from a liquid fund to an equity fund compared to a direct lump sum equity investment?

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EXPLANATION

With an STP, idle money parked in a liquid fund earns better returns than a savings account while being gradually transferred to equity. This combines liquidity management with rupee-cost averaging into equities.

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What is the SEBI-mandated turnaround time for processing a mutual fund purchase transaction and allotting units?

A.Same business day

B.2 business days

C.1 business day

D.3 business days

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For a transmission to a nominee where the value of units is below ₹5 lakh, which of the following documents is typically sufficient?

A.Death certificate, KYC of nominee, and an indemnity bond

B.Probated will

C.Succession certificate from a civil court

D.High Court order

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What is a 'Capital Appreciation SWP'?

A.An SWP where withdrawals increase each year by 10% automatically

B.An SWP that withdraws only the capital appreciation component while keeping the principal intact

C.An SWP reserved for senior citizens above age 60

D.An SWP linked to the repo rate declared by RBI

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Which of the following is TRUE about the CAS issued post-SEBI's 2022 enhancement?

A.CAS now includes EPFO and NPS holdings in addition to mutual funds

B.CAS now includes cost of acquisition and unrealised P&L for mutual fund holdings

C.CAS now also includes demat-held securities, insurance policies, and NPS

D.CAS is now sent daily via SMS for active investors

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Under SEBI's large purchase rule, for a purchase of ₹2 lakh or more in any mutual fund scheme (except liquid/overnight), which NAV is applicable when the application is submitted before cut-off but funds arrive the next day?

A.NAV of the application date

B.NAV of the day the funds are credited

C.Next business day's NAV after fund credit

D.NAV of the second business day after application

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What TDS rate applies on long-term capital gains from equity mutual fund redemptions for an NRI investor?

A.10% (same as resident investors)

B.20% flat without surcharge

C.12.5% plus applicable surcharge and cess

D.30% as NRIs are taxed at the highest slab

Q10

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Under SEBI regulations, within how many days of the transaction must an account statement be sent to the investor?

A.1 business day

B.5 business days from the date of allotment of units

C.3 business days

D.10 business days from the date of investment

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