Official Course Material: NISM Series XIX:C Workbook

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Notes for the Exam!

Utility and Capital Asset Pricing Model

Indices Case Study

Tax Case Study

Offshore Fund Structuring Case Study

Introduction to Chapter 1 – Investments Landscape

Savings vs. Investment | Financial Assets vs. Real Assets | Investment vs. Speculation

Investment Objectives Explained

Understanding Rate of Return

Understanding Investment Risks

Understanding Indian Securities Market Participants

Quiz on Chapter 1

Introduction to Chapter 2: Types of Investments

Traditional Investments vs. Alternative Investments

Understanding Traditional Investments

Understanding Alternative Investments

Understanding Channels for making Investments

Quiz on Chapter 2

Introduction to Chapter 3: Concept of Informational Efficiency

Understanding Market Efficiency, Market Price and Value

Random walk theory & types of market efficiencies

Understanding Market Anomalies

Market Efficiency and Index Funds

Quiz on Chapter 3

Understanding Modern Portfolio Theory

Assumptions in MPT and Utility in Investments

Understanding Expected Rate of Return and Variance in Investments

Understanding Expected Returns and Portfolio Optimization

Quiz on Chapter 4

Capital market theory and assumptions explained

Understanding the Capital Asset Pricing Model

Capital Market Line, Security Market Line & Arbitrage Pricing Theory

Quiz on Chapter 5

Introduction to Chapter 6: AIFs in India and their suitability

Evolution of Investment Funds in India

Definition of ‘Alternative Investment Fund’ and types of Funds

Categories of AIFs and their comparison

Suitability of AIFs for Investors

Comparing Category III AIFs with traditional investments

AIFs as a tool for Portfolio Diversification

Quiz on Chapter 6

Introduction to Chapter 7

Understanding Investors in the AIF Ecosystem

Understanding AIF Sponsors, Trustees, and Investment Managers

Understanding Crowdfunding, Corporate Venture Funding and Co-investment

Understanding Service Providers in Alternative Investment Funds

Understanding Capital Commitment and Drawdown in Investments

Management of conflicts of interest in an AIF

Understanding ESG and the Stewardship Code

First Close, Final Close, Fees and expenses in an AIF

Understanding Performance Fees and Distribution Waterfall in AIFs

Quiz on Chapter 7

Introduction to Chapter 8: Alternative Investment Fund Structuring

Understanding Pooling in the AIF Structure

Anatomy of AIF Constitution and Structures

Understanding the structure of an AIF

Understanding Offshore and Onshore Funds and various structures

Quiz on Chapter 8

Introduction to Chapter 9: Fee structure and fund performance

Computation of Management Fees and discussion on Fees and Expenses

Computation of Hurdle Rate of Return and calculation of Incentive Fee

Computation of High Watermark

Understanding the impact of Catch Up clause

Understanding Gross and Net Return on Investments

Understanding the Impact of GST on AIF Returns

Risk factors in an AIF

Calculation of Mean and Standard Deviation

Understanding Normal Distribution,Skewness and Kurtosis in Investments

Understanding Gross IRR and Net IRR

Understanding Return Metrics: YTM, J Curve and Multiples Method

Understanding Investment Metrics

Quiz on Chapter 9

Introduction to Chapter 10: Indices and Benchmarking

Purpose of Index and factors differentiating indices

Understanding Price Weighted Index and Value Weighted Index

Understanding Free Float in the Stock Market

Equal weighted index and fundamental weighted index

Understanding Stock Market Indices

Understanding Bond Market Indices

Understanding Performance Benchmarking for AIFs: Part I

Understanding Performance Benchmarking for AIFs: Part II

Understanding Alpha Evaluation in AIFs

Understanding Performance Benchmarking for AIFs: Part III

Quiz on Chapter 10

Introduction to Chapter 11

Understanding the Stages of Fundraising for young companies

Investment Strategies for Category I and II Funds

Understanding the Private Equity Deal Pipeline

Category III AIFs: Long Only Equity Market Investment Strategy

Category III AIFs: Long-Short Equity Strategy

Category III AIFs: Market Neutral Equity Strategy

Category III AIFs: Equity Market Directional Strategy

Category III AIFs: Global Macro Strategy

Category III AIFs: Convertible Arbitrage Strategy

Category III AIFs: Event-Driven Investment Strategies

Category III AIFs: Pre-IPO Strategy

Understanding Deal Pipelines for Category III AIFs

Understanding Investor Due Diligence

Understanding Share Subscription and Shareholders Agreements in Investments

Understanding Investor Protection Rights: Milestone Valuation

Understanding Dividend Rights in AIFs

Understanding Anti-Dilution Rights

Affirmative Rights and Veto Rights

Understanding Liquidation Preference

Understanding Exit Rights

ESOP Pools, Automatic Conversion Clause and Protective Provisions in Term Sheets

Negotiations for a board seat

Governance of the AIF

Investment Committee and Investor Advisory Committee

Role of Board of Directors of the Manager in Fund Governance

Investor Grievance Redressal and Online Dispute Resolution

Understanding the Code of Conduct

Quiz on Chapter 11

Introduction to Chapter 12: Fund Due Diligence – Investor Perspective

Introduction to Fund Due Diligence

Investment Due Diligence – Part I

Investment Due Diligence – Part II

Understanding the Evaluation of Fund Managers by Investors

Understanding the Selection of Investment Managers by Investors

Understanding Key Man Clause in Investment Management

Due Diligence of Legal Documents

Fund Due Diligence Information and Questionnaire Overview

Quiz on Chapter 12

Introduction to Chapter 13: Legal Documentation and Negotiation

Introduction to Legal Documentation to AIFs

Trust Deed, LLP Deed and Memorandum of Association

Understanding Investment Management Agreements

Understanding Contribution and Subscription Agreements in Fund Investments

Understanding Side Letters in AIFs

Understanding Private Placement Memorandum for AIFs

Additional Disclosures in the PPM

Understanding Regulatory Requirements for AIFs

Understanding Annual PPM Audit for AIFs

Understanding Custodian Agreements in AIFs

Understanding Distribution Agreements and Placement Fees in AIFs

Quiz on Chapter 13

Introduction to Chapter 14: Valuation of Investments

Introduction to DCF and valuation for Fixed Income Instruments

Understanding Business Valuation Approaches

Enterprise and Equity Value Calculation Explained

Understanding Asset Based Valuation

Understanding Discounted Cash Flow Valuation

Understanding Relative Valuation Methods

Valuation Metrics for Startups Explained

Understanding Angel Tax in Startups

IPEV Valuation Guidelines for AIFs

Net Asset Value (NAV) Explained

Understanding SEBI Guidelines on Valuation of Investments by an AIF

Quiz on Chapter 14

Introduction to Chapter 15: Fund Monitoring, Reporting, and Exit

Introduction to Fund Monitoring in AIFs

Regulatory Framework and Stewardship Code

Understanding Transparency and Disclosure Requirements for AIFs

Reporting requirements for AIFs

Understanding Compliance Test Reports

Understanding Exit Options in Alternative Investment Funds

Understanding Commercial Exit Options in Investments

Understanding the Winding Up of Alternative Investment Funds

Quiz on Chapter 15

Introduction to Chapter 16: Taxation

Taxation of Category I and II AIFs

Understanding Taxation: Capital Gains vs. Business Income

Understanding Taxation of Income for Resident Investors

Understanding Taxation of Different Income Streams in AIFs

Understanding Capital Gains Taxation for Resident Investors

Understanding Taxation for Non-Resident Investors

Certain relevant provisions of the Income Tax Act

Bonus Stripping and Dividend Stripping

Understanding Minimum Alternate Tax (MAT) and Alternate Minimum Tax (AMT)

Understanding Tax Withholding by AIFs and Reporting Requirements

Understanding Taxation of Category III AIFs

Understanding Tax Applicability for Category III AIFs

Understanding Capital Gains Treatment for Category III AIFs

Understanding Tax Applicability for Category III AIFs – Apart from Capital Gains

Tax Surcharge Rates in India

Understanding GAAR, MLI and other applicable taxes

Understanding Tax Withholding with an example

Understanding Capital Gains treatment with an example

Quiz on Chapter 16

Introduction to Chapter 17: Regulatory Framework

Understanding SEBI AIF Regulations

Understanding SEBI’s In-Principle Approval and Fund Listing

Understanding Accredited Investors and Accreditation Agencies

Understanding First Close and Final Close in AIFs

Understanding the regulatory provisions vis-a-vis Capital Commitments

Fundraising Process and Fund Setup Explained

General Investment Conditions for AIFs

Specific Conditions for Category I AIFs

Specific Conditions for Category II AIFs and Excuse & Exclusion

Special Situation Funds and Corporate Debt Market Development Fund

Specific Conditions for Category 3 AIFs

General Obligations and Responsibilities for all AIFs

Understanding the Prevention of Anti-Money Laundering Act, 2002

Introduction to Foreign Investment Regulations in India

Investment Framework Under FEMA Explained

Foreign Investment Routes in India

Understanding Foreign Investment in AIFs

Understanding the SEBI Insider Trading Regulations 2015

Understanding the SEBI PFUTP Regulations and ICDR Regulations

Understanding SEBI FPI Regulations 2019 and FATCA & CRS

Quiz on Chapter 17