Podcast
Questions and Answers
What is the primary purpose of the NISM certification programs?
What is the primary purpose of the NISM certification programs?
- To increase competition among financial institutions
- To establish knowledge benchmarks for various market products and functions (correct)
- To enhance the number of professionals in the financial sector
- To provide financial literacy to the general public
Which entity is responsible for conducting certification examinations for financial professionals?
Which entity is responsible for conducting certification examinations for financial professionals?
- Securities and Exchange Board of India
- National Securities Exchange
- National Institute of Securities Markets (correct)
- Ministry of Finance
Which of the following is NOT a focus area of NISM certification examinations?
Which of the following is NOT a focus area of NISM certification examinations?
- Operations
- Compliance
- Artificial Intelligence (correct)
- Equities
How does NISM aim to improve governance standards in financial markets?
How does NISM aim to improve governance standards in financial markets?
Where is the Patalganga campus of NISM located?
Where is the Patalganga campus of NISM located?
What is the intended outcome of NISM's Continuing Professional Education (CPE) programs?
What is the intended outcome of NISM's Continuing Professional Education (CPE) programs?
What type of education does NISM primarily engage in?
What type of education does NISM primarily engage in?
What is a critical aspect of managing cash flow effectively?
What is a critical aspect of managing cash flow effectively?
What happens if there is a mismatch between cash flow timings?
What happens if there is a mismatch between cash flow timings?
Which of the following best describes NISM's role in financial education?
Which of the following best describes NISM's role in financial education?
What is deemed essential for navigating difficult financial times?
What is deemed essential for navigating difficult financial times?
How can cash flow mismanagement affect an individual?
How can cash flow mismanagement affect an individual?
What role does an investment adviser play regarding a household budget?
What role does an investment adviser play regarding a household budget?
Why is having adequate income at all times significant?
Why is having adequate income at all times significant?
What can be a consequence of prolonged tension due to cash flow issues?
What can be a consequence of prolonged tension due to cash flow issues?
What is the primary focus when preparing a household budget?
What is the primary focus when preparing a household budget?
What restrictions do individual Investment Advisers face under the amendments to the Investment Adviser Regulations?
What restrictions do individual Investment Advisers face under the amendments to the Investment Adviser Regulations?
Why do Investment Advisers refer clients to other agencies?
Why do Investment Advisers refer clients to other agencies?
What is a core function of some Investment Advisers who do not charge for advice?
What is a core function of some Investment Advisers who do not charge for advice?
How do non-individual investment advisers maintain client segregation?
How do non-individual investment advisers maintain client segregation?
What is a central feature of the aggregation model in execution-only services?
What is a central feature of the aggregation model in execution-only services?
What is a benefit of the shared facilities provided by aggregators to distributors?
What is a benefit of the shared facilities provided by aggregators to distributors?
What type of financial products can executing advisers distribute?
What type of financial products can executing advisers distribute?
What must individual Investment Advisers avoid at the investment advisers group level?
What must individual Investment Advisers avoid at the investment advisers group level?
What is the primary regulation that governs insider trading in India?
What is the primary regulation that governs insider trading in India?
Which act includes key provisions applicable to the investment advisory profession?
Which act includes key provisions applicable to the investment advisory profession?
What is an essential ethical consideration for investment advisers?
What is an essential ethical consideration for investment advisers?
Which mechanism allows investors to address grievances with investment advisers?
Which mechanism allows investors to address grievances with investment advisers?
Which regulation deals specifically with the conduct of investment advisers?
Which regulation deals specifically with the conduct of investment advisers?
What is the purpose of the Grievance Redress System in Capital Markets?
What is the purpose of the Grievance Redress System in Capital Markets?
Which act focuses on protecting against fraudulent activities in business practices?
Which act focuses on protecting against fraudulent activities in business practices?
What is a significant ethical dilemma faced by investment advisers?
What is a significant ethical dilemma faced by investment advisers?
Which regulation is concerned with measures to prevent money laundering in financial services?
Which regulation is concerned with measures to prevent money laundering in financial services?
What is one of the key provisions of the Consumer Protection Act?
What is one of the key provisions of the Consumer Protection Act?
Why is receiving an annuity due more valuable than receiving an ordinary annuity?
Why is receiving an annuity due more valuable than receiving an ordinary annuity?
What characterizes a perpetuity?
What characterizes a perpetuity?
What is the formula used to calculate the present value of a perpetuity?
What is the formula used to calculate the present value of a perpetuity?
In the example given, how much is the present value of a bond that pays Rs 10,000 annually with a discount rate of 8%?
In the example given, how much is the present value of a bond that pays Rs 10,000 annually with a discount rate of 8%?
What is an essential aspect of cash flow management in personal finance?
What is an essential aspect of cash flow management in personal finance?
Which of the following best describes the importance of monitoring budgets?
Which of the following best describes the importance of monitoring budgets?
What is the role of a household budget in personal finance?
What is the role of a household budget in personal finance?
What does contingency planning in personal finance entail?
What does contingency planning in personal finance entail?
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Study Notes
Overview of NISM and Its Purpose
- National Institute of Securities Markets (NISM) provides professional education, certification, training, and research in financial markets.
- Aims to enhance governance standards and financial literacy among stakeholders.
- Collaborates with financial sector regulators to promote financial education.
NISM Certification Programs
- Designed to raise quality and professional standards in various segments of the financial services sector.
- Includes certification examinations and Continuing Professional Education (CPE) for intermediaries in diverse product lines and functions.
- Establishes knowledge benchmarks for market products, including Equities, Mutual Funds, and Compliance.
Investment Adviser Regulations
- Individual investment advisers must choose between advisory and distribution services per SEBI regulations.
- Advisers can provide execution services using direct schemes in the securities market but cannot receive compensation at the group level.
- Execution-only services focus on distributing financial products, generating income through commissions.
Understanding Perpetuity
- Perpetuity refers to a cash flow from an investment that continues indefinitely.
- Common examples include perpetual bonds and life pensions.
- Present value of perpetuity can be calculated using the formula: ( PV = C / r ), where ( C ) is cash flow and ( r ) is the discount rate.
Evaluating Client Financial Position
- Cash flow management is crucial in personal finance, linking income with expenditures to ensure savings.
- Preparing a household budget helps understand monthly income sources and expenditures to allocate funds effectively.
- Importance of monitoring budgets to create savings plans and to prepare for contingencies.
Grievance Redress Mechanisms
- Consumer Protection Act establishes a framework for investor grievance redressal.
- Various systems are in place for redressal in capital markets, banking, and insurance sectors.
- Securities Appellate Tribunal addresses appeals relating to grievances in the securities market.
Ethical Considerations for Investment Advisers
- Ethical conduct is fundamental to maintaining trust and integrity in the investment advisory profession.
- Advisers face ethical dilemmas and have fiduciary responsibilities to prioritize client interests.
- SEBI provides 'Do's and Don'ts' for investors to enhance awareness and protect against unethical practices.
Importance of Cash Flow Management
- Cash flow management facilitates financial stability and aids in achieving long-term financial goals.
- Disruptions in cash flow may lead to debt accumulation and financial stress, affecting personal well-being.
- Essential for maintaining a balance between income received and expenses due to avoid mismanagement.
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