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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 records the terms on which the portfolio manager manages the client's funds, including fees, scope of authority and risk factors?

The portfolio management agreement between the manager and the client records the terms of the PMS relationship, including fees, the manager's authority, the investment approach and risk factors. Other documents such as mutual fund offer documents or account forms do not serve this purpose.

  1. APortfolio management agreement between the manager and the clientCorrect
  2. BOffer document of a mutual fund scheme
  3. CClient's demat account opening form alone
  4. DStock exchange trading terminal manual

Explanation

The portfolio manager and client enter into a written agreement that sets out the investment approach, fees, authority, risks and other terms. A mutual fund offer document relates to a scheme, and an account opening form or terminal manual does not define the PMS relationship.

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