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Why NISM/XXI-A exam guide

NISM Series XXI-A: PMS Distributors

For distributing portfolio management services. Everything you need to know before you book, and a free way to prepare.

100 questions120 minutes60% to passNISM fee ₹1,500
Start the free course 10-question sample test
100Questions
120 minDuration
60%Pass mark
YesNegative marking
₹1,500NISM fee
3 yearsValid for

NISM Series XXI-A is the Portfolio Management Services (PMS) Distributors Certification Examination, for people who distribute PMS to investors. It covers markets, stocks, fixed income and derivatives, then how PMS works: the process, operations, performance measurement, tax and regulation.

Who should take it
  • Relationship managers in wealth management and private banking
  • Mutual fund distributors moving up to high-net-worth clients
  • Students who want to start in wealth management
What it opens up
  • Distribute PMS, subject to the registration rules that apply to you
  • A grounding for wealth and private banking roles
See careers
Syllabus weightage

Where the marks are.

The PMS-specific units carry the most weight: the portfolio management process, operations, the role of a portfolio manager and performance measurement. Learn the regulatory unit closely; rules on minimum investment, fees and disclosure come up again and again in practice.

Share of questions per unit in the FundsSchool Final exam, built to NISM’s syllabus units. The current NISM workbook is the final word on weightage.

Portfolio Management Process15%
Operational Aspects of Portfolio Managers13%
Investing in Stocks10%
Role of Portfolio Managers10%
Performance Measurement and Evaluation of Portfolio Managers10%
Regulatory, Governance and Ethical Aspects of Portfolio Managers10%
Investments7%
Introduction to Securities Markets5%
Investing in Fixed Income Securities5%
Derivatives5%
Collective Investment Vehicles5%
Taxation5%
The syllabus, chapter by chapter

12 chapters, about 2 hours.

Every chapter is free to read here, with a worked example, the exam trap and a three-question check.

01Investments basics9 min · Saving vs investing, real returns, asset classes, risk types, compounding and why asset allocation is the big decision.02Securities markets9 min · Primary and secondary markets, who does what (SEBI, exchanges, clearing, depositories), T+1 settlement, indices…03Investing in stocks9 min · Equity ownership, fundamental vs technical analysis, EPS, P/E, P/B, ROE, PEG, Gordon growth valuation and equity risks…04Investing in fixed income securities9 min · Bond terms, Indian debt instruments, credit ratings, bond pricing, current yield vs YTM, duration and debt strategies…05Derivatives9 min · Forwards, futures, options and swaps; cost-of-carry pricing, margins, option payoffs, Greeks, put-call parity and PMS…06Mutual funds9 min · Fund structure, scheme types, NAV and cut-off rules, loads, TER caps, SIP/STP/SWP, fund taxation, SIFs…07Role of PMS in investors' portfolios11 min · What a PMS is under the 2020 Regulations, discretionary vs non-discretionary vs advisory, the ₹50 lakh minimum…08Operational aspects of PMS9 min · Onboarding, disclosure document and agreement, high-water mark fees, exit load caps, reporting, direct onboarding…09Portfolio management process9 min · IPS, objectives and constraints, risk profiling, asset allocation, portfolio return and risk maths, construction…10Performance measurement and evaluation of PMS9 min · Absolute vs CAGR, TWRR vs XIRR with a worked example, Sharpe, Treynor, alpha, information ratio, and SEBI/APMI…11Taxation10 min · Why PMS clients are taxed on every trade, equity and debt rates and holding periods, loss set-off, fees, in-specie…12Regulatory, governance and ethical aspects of PMS9 min · Registration conditions, fiduciary duties and investment limits under the 2020 Regulations, investor protection…
A study plan that fits

Four weeks, 30 minutes a day.

A comfortable pace alongside college or work. In the app, set your exam date and it plans each day for you.

Week 1Chapters 1 to 6

One chapter a day with its quick check. About 54 minutes of reading in all.

Week 2Chapters 7 to 12

Same rhythm. About 57 minutes of reading. Review your exam-trap cards at the weekend.

Week 3Practise

Chapter tests on your weakest chapters, Quick 20s every day, then your first full-length practice mock.

Week 4Exam ready

A second mock, then the Final exam on the real clock. Revise the chapters it flags and book your NISM slot.

Don’t lose easy marks

Traps people fall for.

A sample from the course. Every chapter marks the trap the exam likes to set.

Chapter 1

Exam trap. Diversification reduces company-specific risk, not market risk. If an option says diversification removes all risk, it is wrong. Also, the Rule of 72 is an approximation; when a question gives you the formula and a calculator-friendly number, use the formula.

Read “Investments basics”
Chapter 4

Exam trap. Coupon rate is fixed; yield changes. When a question says interest rates rose, the bond's price fell and its yield rose, but the coupon stayed the same. Also do not confuse current yield (coupon ÷ price) with yield to maturity, which includes the gain or loss at redemption.

Read “Investing in fixed income securities”
Chapter 7

Exam trap. ₹50 lakh applies to the total funds and securities a client places with a portfolio manager, valued at market, at the start of the relationship. A market fall below ₹50 lakh is fine; a voluntary withdrawal that breaches it is not. Do not confuse the PMS minimum (₹50 lakh) with the AIF minimum (₹1 crore) or the SIF minimum (₹10 lakh), and do not confuse the manager's net worth (₹5 crore) with any client requirement.

Read “Role of PMS in investors' portfolios”
Chapter 10

Exam trap. TWRR is what SEBI prescribes for the manager; XIRR or MWRR is what the client personally earned. Do not annualise a 30% three-year return as 10%; use the compound root. And compare against a total return index, since the benchmark's dividends count too.

Read “Performance measurement and evaluation of PMS”
Formulas to know

Learn these cold.

Chapter 1
Real return (exact) = (1 + Nominal return) ÷ (1 + Inflation) − 1  |  Approximation: Nominal − Inflation
Chapter 2
Free-float market cap = Shares outstanding × Price × Free-float factor  |  Index weight = Company free-float cap ÷ Total free-float cap of the index
Chapter 4
Price = Σ Coupon ÷ (1 + y)^t + Face value ÷ (1 + y)^n  |  Current yield = Annual coupon ÷ Price  |  YTM = the discount rate y that makes the price equal the present value
Chapter 5
F = S × (1 + (r − d) × T)  (simple)  |  F = S × e^((r − d)T)  (continuous), where S = spot, r = risk-free rate, d = dividend yield, T = time in years  |  Basis = Spot − Futures
Try ten questions now.

A free XXI-A sample test across the syllabus, every answer explained. Takes about ten minutes.

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XXI-A, answered

Questions about this exam.

How many questions are in NISM Series XXI-A?

100 questions in 120 minutes. You need 60% to pass, and wrong answers carry negative marks, so skip what you truly don’t know. Confirm the current pattern on the NISM portal before you book.

How long should I prepare?

Our 12-chapter course takes about 2 hours to read. Add chapter tests and two practice mocks, and three to four weeks at around 30 minutes a day is a comfortable pace. Use the Final exam in the app to check you’re ready before you book.

What does it cost?

NISM charges ₹1,500 to enrol (as listed when we last checked). Preparing on FundsSchool is completely free: every chapter, question, mock and the Final exam.

How long is the certificate valid?

Three years from the date you pass. Plan your renewal before it lapses; NISM lists the renewal options for each certificate on its portal.

Are FundsSchool questions from the real exam?

No. Every question is original practice material written to the official syllabus and pattern. NISM does not publish its exam questions.

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