What is the first test for sieve rising-a sticky-nut test!

Copyright © HT Digital Streams Limit all rights reserved. Sebi launched Sieve in February, a product to bridge the gap between retail -oriented funds and PMs targeting the rich. Summary The minimum ticket size for a sieve is £ 10 lakhs while it is for a PMS £ 50 lakhs. Sift is designed for investors who want to take higher risks than a mutual fund. Mutual funds are running specialized investment funds (SIFs) with a minimum ticket size of £ 10 Lakh, but the product is facing a distribution gate. Only a fraction of India’s 1.8 lakh interruptions fund sellers are qualified to distribute this product to the end consumer, given the more difficult derivative exams needed to sell it. There is a compulsory obstacle that needs to be cleaned – the National Institute of Security Markets’ Nism XIII (derivatives) to get a permit for sieve distribution. The exam is a more difficult note to crack compared to the exam for mutual fund distributions, the Nisma VA, multiple participants in the industry told Mint. There are more than 1,000 distributors who solved the Nism XIII derivative exam and applied for SIF registration on September 19, according to Cams. The number of mutual fund distributors (MFD), on the other hand, is much higher at 1.8 lakhs. The Securities and Exchange Board of India launched SIF in February, a product to bridge the gap between retail -oriented mutual funds and portfolio management services (PMS) that target the rich. The minimum ticket size for a sieve is £ 10 lakhs, while for a PMS £ 50 lakhs. Sift is designed for investors who want to take higher risks than a mutual fund. From now on, the Edelweiss Mutual Fund has announced the launch of the Altiva Hybrid Long-Short Fund, the new Fund Offering (NFO), for which will be opened for subscription on October 1. Quant Mutual Fund announced the QSIF Equity Long-Hort Fund, which is currently open for subscription. SBI Mutual Fund and Mirae Asset Investment Managers have also announced the brands for their sieve, but still have to launch their funds. What makes the new exam more difficult? People who appeared for the derivative exam say that it is very technical with more calculations than the basic MFD exam. In addition, the Nism XIII derivative exam has a negative mark of 25% assigned to each question. The basic nism of Mutual Fund exam has no negative marking. Suraj Shroff, founder of Infiniti Investments and a distributor of mutual fund, which recently appeared for the Nism XIII exam, said in contrast to the basic MFD exam – which mostly covers regulations and can be cleaned by reading the material several times – “For those who regularly deal with stock and currencies -derived products, the exam is manageable. But for those who read the exam material and try the exam, it’s hard to pass without enough exercise,” Shroff added. In addition, the derivative of application -based numericals, says Shrey Mehta, director of Sanjay Mehta Financial Services. For example, one might ask what happens with the value of a well if you buy it at a certain price and the value of the underlying movements from point A to point B, Mehta said. Emails sent to Nism and Sebi to the new exam remained unanswered until purple time. The low distribution numbers due to the strict requirements may indeed be a problem for the new product. Amit Sahita, director of FinCode Advisory Services, will not be fully understood by every distributor. “Out of 1.8 lakh distributors, less than 10,000 are currently registering sieve, it is less than 5%, which will be a very small percentage of distributors to begin with.” “It will take time, as mutual funds are retail products and distributors already have a strong understanding. But in sieve, it is about derivatives that can require specialized training,” says Deepak Jain, President and Head – Sales at Edelweiss Asset Management Ltd. Why the need for a strict test? The sieve exam is strict for a reason for a reason, as it provides for sophisticated investors. According to Venkat N. Chalasani, CEO of the Association of Mutual Funds of India, as the sieve is a developed product, it is important that the person he distributes, understands its structures, trading strategies, risk management and the regulatory environment. “The difficulty of the exams prescribed for MFDs selling sieve’s is therefore high,” he added. Suranjana Borthakur, head of distribution and strategic alliances at Mirae Asset Investment Managers (India), reflects his view and says that the exam is more strict and that the higher standards will increase the quality of distribution and strengthen investor confidence. “Each new category in the industry takes time to build scale, and sieve is no different. Just as the number of application reference number for MF distributors (ARN) holders has gradually increased over the years, the basis of sieve distributors will also grow with awareness and confidence,” Borthakur added. The actual scale of sieve will begin when mutual funds start to start several funds under sieve, experts say. Currently, with only two available funds, investors may not be able to diversify. With at least 10-15 products over 5-7 AMCs, with each AMC offering 2-3 different sieve strategies, investors can diversify and feel more comfortable despite the lack of records, Shrey added. Also in the past, similar exams had disappointment. One of them was Sebi’s compulsory exam for alternative investment funds (AIFs). In 2024, Mint reported that 60 of the 100 managers failed the exams needed for AIFs to keep their registration going. Learn to crack the exam to keep up with the provision of sieve, AMCs practice their distributors to appear and clean this exam. Jain of Edelweiss said since the biggest challenge of scaling sieve would initially be the limited number of distributors, AMCs (asset management companies) such as his own training of their people are. As a result, the number of people who passed the derivative exam and applied for sieve registration, gradually from 248 in July to 1 009 from September, said Cams chief program officer Syed Hassan. “In September, registrations entered the pace of 1-2 every half hour,” he said. “We have held physical three-day programs with online sessions to help distributors make the derivative exam appear. So far, we have trained more than 2000 distributors across India,” says Jain of Edelweiss MF. However, the training is completely focused on helping them remove the derivative exam – to cover modules on stocks, fixed income and currency – without tackling product details, Jain added. Distributors outside major cities are also facing practical challenges. In some tiger-3 places and beyond, candidates should wait weeks for exams due to limited test centers, a person who is familiar with the matter said. SBI MF helps their distributors with easily readable content modules and gets the slots available for their exams with Nism, says DP Singh, deputy managing director and joint CEO of SBI Mutual Fund. He said with the evolution of the industry and investors there will be a lot of interest from distributors and investors, and there is a great potential to scale up hybrid-long short funds and the sieve category in the future. Hassan of Cams said sieve is a new area for many distributors, but the 1,000+ that has already cleaned the exam has shown that it is feasible. “As word spreads, more will participate, drawn by the big event, high ticket sizes and the momentum of emerging launches,” he added. The risk of selling sieve incorrectly, some industry participants have noticed the risk of wrong sale and says that the entry to it will help prevent it. SIFs usually have higher distribution commissions because their total expenditure ratio (ter) is higher in the beginning phases, as the fund size will be smaller. “Old-school distributors could possibly focus on these commissions and aggressively print sieve. For example, to persuade a customer with just a £ 10 lakh portfolio to invest the entire amount in a single sieve,” said Sahita of Fincode Advisory. New-age advisors with a long-term approach will only recommend SIFs for customers with portfolios above £ 1, where such investments are more suitable. “They are focused on building customer relationships over decades and not chasing profits in the short term,” Sahita added. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Mutual Funds Read Next Story