NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)

CERTIFICATION EXAM – CASELET NO. 5

About PASS4SURE.in

PASS4SURE is a professional online practice test bank for various NSE NCFM, NISM and BSE exams. The team behind
PASS4SURE has decades of experience in the financial and stock markets and have succeeded in preparing practice
question bank which will help not only to pass the exams easily but also get good knowledge of the subject.

Our online mock exams contain questions which are carefully analysed by the experts and have a high probability of being
asked in the exams. Thus all PASS4SURE questions are highly valued and contribute to an almost 100% success rate.

We do not believe in offering you thousands of questions but most important 400 – 500 practice questions and answers.
PASS4SURE understands that time and money is valuable for our students, so we regularly update all our exams. The old
questions are deleted and new important questions are added. Our LAST DAY REVISION test are on the spot. This is done
to ensure that the students learns what is most important and pass the exams. You do not have to try again and again
wasting time and money.

Our simple aim is to simplify the NCFM, NISM and BSE exams. ALL THE BEST.

IMPORTANT – The viewing rights for this downloaded Question Bank will automatically
expire after 60 days from the date of purchase.

TEST DETAILS – The NISM Series XB – Investment Adviser Certification (Level 2) exam is a 100 mark exam with
60% as passing marks. The question paper will consist of 36 multiple choice questions of 1 mark each and 8 Case
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.

All Rights Reserved. No Part of this documents may be reproduced, stored in a retrieval system, or transmitted, in any
form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission
from PASS4SURE.in. For any clarification regarding this document or if you feel there are errors in the question bank,
please write us at info@pass4sure.in
 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 5

CASELET NO. 5

M/s. Fairdeal Money Managers are popular investment advisors. One of their client Mrs. Seema has a
registered power of attorney (POA) of her son who is a NRI and living abroad for last many years. She wishes
to invest in Mutual Funds on her son's behalf. She has been advised that she can easily do the same and only
her KYC needs to be done. Also as per the POA she has to make her grandson as the nominee for the
investments. M/s. M/s Fairdeal Money Managers also has a charitable trust as its client and Mr. Mehta is the
trustee of this trust. As per the trust deed it can invest in Government securities. Mr. Mehta is advised to invest
in Gilt Funds as these funds invest in Govt. Gilt securities. Also the offer document of Gilt Fund mentions
trusts as eligible investors. Mr. Mehta is also advised to apply for physical units as demat units cannot be
allotted to Charitable Trusts.

Question 1 Was the advice given to Mrs Seema to appoint her grandson as nominee
correct ?

(a) The advice given is correct

(b) The advice given is incorrect as a person holding a POA cannot appoint a
nominee

(c) In Mutual Fund investments, there is no provision of appointing a nominee

(d) As such, NRIs cannot appoint a nominee

Correct Answer 1 The advice given is incorrect as a person holding a POA cannot appoint a
nominee

Answer The holder of POA cannot appoint a nominee for the investments he makes on
Explanation behalf of the NRI.
 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 5

M/s. Fairdeal Money Managers are popular investment advisors. One of their client Mrs. Seema has a registered
power of attorney (POA) of her son who is a NRI and living abroad for last many years. She wishes to invest in
Mutual Funds on her son's behalf. She has been advised that she can easily do the same and only her KYC needs to be
done. Also as per the POA she has to make her grandson as the nominee for the investments. M/s. M/s Fairdeal
Money Managers also has a charitable trust as its client and Mr. Mehta is the trustee of this trust. As per the trust deed
it can invest in Government securities. Mr. Mehta is advised to invest in Gilt Funds as these funds invest in Govt. Gilt
securities. Also the offer document of Gilt Fund mentions trusts as eligible investors. Mr. Mehta is also advised to
apply for physical units as demat units cannot be allotted to Charitable Trusts.

Question 2 Is the advice to Mrs Seema to submit her & her son's KYC to do
investments on behalf of her son correct ?

(a) Yes, as KYC of both of them is required

(b) No, as only her son's KYC is required

(c) The investment cannot be done unless her son personally comes to India to
sign the initial documents

(d) None of the above

Correct Answer 2 Yes, as KYC of both of them is required

Answer A Power of Attorney has two parties: the grantor, who is the primary investor
Explanation and the holder, who is authorised to execute anagreed set of actions on behalf
of the grantor.

The grantor and the holder both have to abide by the guidelines for PAN and
KYC compliance.
 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 5

M/s. Fairdeal Money Managers are popular investment advisors. One of their client Mrs. Seema has a registered
power of attorney (POA) of her son who is a NRI and living abroad for last many years. She wishes to invest in
Mutual Funds on her son's behalf. She has been advised that she can easily do the same and only her KYC needs to be
done. Also as per the POA she has to make her grandson as the nominee for the investments. M/s. M/s Fairdeal
Money Managers also has a charitable trust as its client and Mr. Mehta is the trustee of this trust. As per the trust deed
it can invest in Government securities. Mr. Mehta is advised to invest in Gilt Funds as these funds invest in Govt. Gilt
securities. Also the offer document of Gilt Fund mentions trusts as eligible investors. Mr. Mehta is also advised to
apply for physical units as demat units cannot be allotted to Charitable Trusts.

Question 3 Is the advice given to Mr. Mehta regarding investment in Gilt Funds
correct ? What are your views ?

(a) As the offer document of Gilt Fund permits Charitable Trusts as investors, Mr.
Mehta can invest in Gilt Funds

(b) The Investment Application Form to invest in Gilt funds should contain
signatures of all trustees

(c) Gilt funds of Central Govt. and State Govt. both should be considered for
investments

(d) No, the advice given is incorrect as such investment is barred by the trust deed

Correct Answer 3 No, the advice given is incorrect as such investment is barred by the trust deed

Answer
Explanation The trust deed is the most important document and if it does not mention Gilt
Funds (as in the above case) , then investments cannot be made in Gilt Funds.
 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 5

M/s. Fairdeal Money Managers are popular investment advisors. One of their client Mrs. Seema has a registered
power of attorney (POA) of her son who is a NRI and living abroad for last many years. She wishes to invest in
Mutual Funds on her son's behalf. She has been advised that she can easily do the same and only her KYC needs to be
done. Also as per the POA she has to make her grandson as the nominee for the investments. M/s. M/s Fairdeal
Money Managers also has a charitable trust as its client and Mr. Mehta is the trustee of this trust. As per the trust deed
it can invest in Government securities. Mr. Mehta is advised to invest in Gilt Funds as these funds invest in Govt. Gilt
securities. Also the offer document of Gilt Fund mentions trusts as eligible investors. Mr. Mehta is also advised to
apply for physical units as demat units cannot be allotted to Charitable Trusts.

Question 4 Is the advice to apply in physical units correct ? What are your
comments?

(a) The advice given is wrong. Charitable Trusts can open demat accounts and
apply for demat units

(b) The advice given is correct. Charitable Trusts has to apply for units in physical
form and then later convert into demat units

(c) Charitable Trusts cannot open Demat account

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

Correct Answer 4 The advice given is wrong. Charitable Trusts can open demat accounts and
apply for demat units
 NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 5

Practice Question Banks also available for :

NISM

NISM Series I: Currency Derivatives Certification Exam

NISM Series V A: Mutual Fund Distributors Certification Exam
NISM Series VI: NISM Series VI - Depository Operations Certification Exam
NISM Series VII: Securities Operations and Risk Management
NISM Series VII: Equity Derivatives Certification Exam
NISM Series III A: Securities Intermediaries Compliance certification Exam
NISM Series X A : Investment Adviser (Level 1) Certification Exam
NISM Series X B: Investment Adviser (Level 2) Certification Exam

NCFM

NCFM Financial Markets: A Beginners Module

NCFM Capital Market (Dealers) Module
NCFM Derivative Market (Dealers) Module

BSE

Certificate on Securities Market (BCSM)

NISM SERIES X B : INVESTMENT ADVISER (LEVEL 2)
CERTIFICATION EXAM – CASELET NO. 5