AIF Distributors I & II
Distributor certification for Category I & II Alternative Investment Funds — venture capital, PE, infrastructure, real estate.
Exam Pattern & Marking
Detailed Syllabus
10 chapters · 100 total marks
| # | Chapter | Marks | Practice Qs |
|---|---|---|---|
| 1 | Valuation Taxation and Good Practices | 20 | 75 |
| 2 | Fund Due Diligence | 15 | 75 |
| 3 | Fund Structuring | 10 | 50 |
| 4 | Investment Process and Governance | 10 | 50 |
| 5 | Legal Documentation | 10 | 50 |
| 6 | Regulatory Framework | 10 | 50 |
| 7 | Risk and Return | 10 | 50 |
| 8 | Fund Monitoring and Exit | 5 | 25 |
| 9 | Industry Concepts | 5 | 25 |
| 10 | Overview and Indian Market | 5 | 50 |
| Total | 100 | 500 |
Marks per chapter reflect the official NISM syllabus weightage. Practice question counts show the bank size in our app — use them to gauge depth of preparation needed per chapter.
Key Knowledge Areas
Overview
Series XIX-A is for distributors selling Category I and II Alternative Investment Funds (AIFs) — VC funds, infrastructure funds, debt funds, PE funds, social impact funds, real estate funds. SEBI requires this for any distributor onboarding clients into Cat I/II AIFs.
At a glance: 100 questions · 2 hours · 60% pass mark · 0.25 negative marking · ₹1,500 + GST.
Who should take XIX-A
- Wealth managers / RMs distributing Cat I/II AIFs
- IFAs onboarding HNI/UHNI to private market funds
- Sales staff at fund houses launching AIFs
Key Knowledge Areas
AIF Categories
| Category | Examples | Tax pass-through? |
|---|---|---|
| Cat I | VC, infra, social impact, SME | Yes (most) |
| Cat II | PE, debt, real estate, fund-of-funds | No (mostly) |
Cat I receives govt incentives — pass-through tax means investors are taxed directly, not at fund level. Cat II is taxed at fund level (residuary treatment).
Fund structuring
Common AIF structures:
- Trust — most popular, contributory trust under Indian Trusts Act 1882
- LLP — limited liability partnership, for some PE funds
- Company — rare for AIFs
Due diligence
For any AIF distributor, DD checklist before onboarding:
- SEBI registration verified
- Sponsor track record
- Fund manager credentials
- PPM (Private Placement Memorandum) review
- Fee structure clarity
- Exit terms and lock-in
- Reporting frequency
AIF taxation
- Cat I/II pass-through (most): investor taxed on share of income, capital gains, etc.
- Surcharge structure differs vs MF
- LTCG / STCG holding period varies by underlying asset
- TDS by fund on distributions
Risk & return
Cat I/II AIFs are illiquid (lock-in 3-7 years typical), HNI-suitable, ₹1 crore min investment. High-return potential but high concentration risk.
Exam Tips
Tip 1: AIF taxation — pass-through Cat I, fund-level for most Cat II — is the most-tested chapter.
Tip 2: PPM components and DD checklist appear in scenario questions. Know what to look for.
Tip 3: Distinguish Cat I/II from Cat III (covered in XIX-B) — risk/leverage profile is fundamentally different.
Tip 4: Recent SEBI AIF Phase II reforms (accredited investor, large value funds) are exam-favourites.
Try the Free Quiz
Test your knowledge with our free XIX-A practice quiz — or get the full bank of 500+ XIX-A questions plus mock tests in the NISM Exam Prep app.
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