NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)

CERTIFICATION EXAM – CASELET NO. 7

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TEST DETAILS – The NISM Series XB – Investment Adviser Certification (Level 2) exam is a 100 mark exam with
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Studies having 4 multiple choice questions of 2 marks each ( A total of 36 + 32 = 68 questions). There is 0.25%
negative marking. The time duration is 120 Minutes.

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 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 7

CASELET NO. 7

Mr Gaurav, a client of M/s. Plansafe Investment Advisors was interested in investing in Mutual Funds in the
name of his minor daughter. He was advised by Plansafe to invest in his own name and make his minor
daughter a nominee as this would be easier and result in the same thing.

A client Mr. Shah wanted to invest in Mutual Funds in demat form. Plansafe advised against this as he would
have to compulsorily convert all his holding into demat form.

Mr. Robert, a foreigner also wanted to invest in Mutual Funds but he was told by Plansafe that foreigners
cannot invest in Mutual Funds in India, but they can invest in equity shares.

Question 1 Can Mr. Gaurav become a joint holder along with his minor daughter
while investing in Mutual Funds ?

(a) Yes, he can become a joint holder

(b) No, he cannot become a joint holder

Correct Answer 1 No, he cannot become a joint holder

Answer An investment on behalf of a minor cannot have joint holders. Thus

Explanation investments can be held solely by the minor or jointly with the guardians, as
allowed by the terms of the investment product.

Minors have to be sole holders or first holders of the investment.

 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 7

Mr Gaurav, a client of M/s. Plansafe Investment Advisors was interested in investing in Mutual Funds in the name of
his minor daughter. He was advised by Plansafe to invest in his own name and make his minor daughter a nominee as
this would be easier and result in the same thing.

A client Mr. Shah wanted to invest in Mutual Funds in demat form. Plansafe advised against this as he would have to
compulsorily convert all his holding into demat form.

Mr. Robert, a foreigner also wanted to invest in Mutual Funds but he was told by Plansafe that foreigners cannot
invest in Mutual Funds in India, but they can invest in equity shares.

Question 2 Was the advice given to Mr. Gaurav correct ? What are your comments
on the same ?

(a) Mr. Gaurav can invest in his daughters name and he will be the guardian. His
KYC would be required

(b) Mr. Gaurav can invest in his daughters name and he will be the guardian. His
KYC would not be required

(c) Mr. Gaurav can invest in his daughters name and he will be the guardian. His
KYC would be required only if the investment is above Rs 2 lakhs

(d) The advice given to Mr. Gaurav was correct

Correct Answer 2 Mr. Gaurav can invest in his daughters name and he will be the guardian. His
KYC would be required

Answer KYC of the guardian is compulsorily required for investments in Mutual

Explanation Funds.
 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 7

Mr Gaurav, a client of M/s. Plansafe Investment Advisors was interested in investing in Mutual Funds in the name of
his minor daughter. He was advised by Plansafe to invest in his own name and make his minor daughter a nominee as
this would be easier and result in the same thing.

A client Mr. Shah wanted to invest in Mutual Funds in demat form. Plansafe advised against this as he would have to
compulsorily convert all his holding into demat form.

Mr. Robert, a foreigner also wanted to invest in Mutual Funds but he was told by Plansafe that foreigners cannot
invest in Mutual Funds in India, but they can invest in equity shares.

Question 3 Was the advice given to Mr. Shah correct ?

(a) The advice given to Mr. Shah is correct

(b) The advice given is incorrect. Mr. Shah can hold some units in demat form
and others in non demat form

Correct Answer 3 The advice given is incorrect. Mr. Shah can hold some units in demat form
and others in non demat form
 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 7

Mr Gaurav, a client of M/s. Plansafe Investment Advisors was interested in investing in Mutual Funds in the name of
his minor daughter. He was advised by Plansafe to invest in his own name and make his minor daughter a nominee as
this would be easier and result in the same thing.

A client Mr. Shah wanted to invest in Mutual Funds in demat form. Plansafe advised against this as he would have to
compulsorily convert all his holding into demat form.

Mr. Robert, a foreigner also wanted to invest in Mutual Funds but he was told by Plansafe that foreigners cannot
invest in Mutual Funds in India, but they can invest in equity shares.

Question 4 Was the advice given to Mr. Robert correct ?

(a) The advice given to Mr. Robert is correct

(b) The advice given is incorrect. Foreigners can invest in Mutual Funds and
Equities

Correct Answer 4 The advice given is incorrect. Foreigners can invest in Mutual Funds and
Equities

Answer A foreigner is eligible to invest as a Qualified Foreign Investor - QFI and has
Explanation to undergo the KYC process with any of the designated qualified DPs listed
by SEBI. Only then will he be eligible to invest in Mutual Funds, Equities etc.
 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 7

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NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 7