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NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Collective Investment Vehicles

A category III AIF and a PMS both manage money for wealthy investors. Which of the following is a correct distinction under the Indian regulatory framework?

An AIF pools money from investors into a common fund where investors hold units, while a PMS manages each client's portfolio separately with securities held in the client's own name. Both are regulated by SEBI, not RBI.

  1. AAn AIF pools investor money into a fund with units, whereas a PMS manages each client's portfolio separately with securities held in the client's own nameCorrect
  2. BBoth hold pooled investor money in a single common portfolio
  3. CA PMS issues units to all investors, while an AIF holds securities in each investor's individual demat account
  4. DA PMS must be registered with RBI, while an AIF is not regulated

Explanation

AIFs are pooled vehicles regulated by SEBI, with investors holding units. A PMS under the SEBI Portfolio Managers Regulations manages individual client portfolios, and in discretionary and non-discretionary services securities are held in the client's name. Both are SEBI-regulated, so the RBI option is wrong.

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