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NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Operational Aspects of Portfolio Managers

In a discretionary PMS, which document must the portfolio manager enter into with the client before accepting funds or securities for management?

The portfolio manager must sign a portfolio management agreement with the client before taking funds or securities. This written contract sets out services, fees, risks and the investment approach, so it is the basic document that governs the relationship.

  1. AA portfolio management agreement setting out the terms of the relationshipCorrect
  2. BA demat debit instruction slip
  3. CA mutual fund account statement
  4. DA stock exchange membership certificate

Explanation

SEBI's portfolio manager regulations require a written agreement between the portfolio manager and the client before funds or securities are accepted. It defines the scope of services, fees, risks and the investment approach. The other documents have nothing to do with starting a PMS relationship.

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