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nism-series-va-prerequisites-become-mutual-fund-distributor[ MUTUAL FUND DISTRIBUTORS ]

What sequential prerequisites must an individual satisfy to legally operate as a Mutual Fund Distributor and earn trail commissions in India?

[ A ]Obtain a charter from the Reserve Bank of India and deposit Rs. 10 crore in a commercial escrow account.
[ B ]Register as a Chartered Accountant and complete 5 years of equity derivatives day-trading experience.
[ C ]Purchase at least Rs. 50 lakhs worth of mutual fund units in their personal name as self-business.
[ D ]Attain minimum age of 18 years, pass the NISM-Series-V-A Certification Exam, complete KYD (document verification and biometrics), obtain an ARN from AMFI, and empanel with AMCs.[ CORRECT ]
Takeaway

Option D is correct: Attain minimum age of 18 years, pass the NISM-Series-V-A Certification Exam, complete KYD (document verification and biometrics), obtain an ARN from AMFI, and empanel with AMCs.

Derivation
To become a mutual fund distributor: (1) The individual must be at least 18 years of age, (2) Pass the NISM-Series-V-A: Mutual Fund Distributors Certification Examination (or complete CPE if eligible), (3) Fulfill Know Your Distributor (KYD) requirements including document verification and biometrics at CAMS-PoS, (4) Apply online on the AMFI website to obtain an AMFI Registration Number (ARN), and (5) Empanel with AMCs to distribute their Regular Plans. This question tests the regulatory licensing roadmap for MFDs. A common error is assuming distributor licensing requires banking charters or personal capital commitments.
Why the others fail
A — Obtain a charter from the Reserve Bank of India and deposit Rs. 10 crore in a commercial escrow account.
Mutual fund distribution is regulated under SEBI/AMFI frameworks and does not require an RBI banking charter or Rs. 10 crore deposit.
B — Register as a Chartered Accountant and complete 5 years of equity derivatives day-trading experience.
A Chartered Accountancy qualification is not required; passing the specialized NISM Series V-A certification is the statutory mandate.
C — Purchase at least Rs. 50 lakhs worth of mutual fund units in their personal name as self-business.
Distributors earn commission on third-party mobilized investments; personal investments (self-business) earn zero commission and are not prerequisites.